Almost 60% of oil-importing emerging-market and developing economies have seen an increase in domestic-currency oil prices since Russia invaded Ukraine.
have fallen off significantly from their $5+ peak, they are still 10.6% higher than a year ago; diesel is 46.5% higher while the cost of food is up 11.4% in the past year, making for the highest annual increase in 23 years. Experts say that inflation in the U.S. might have peaked in the summer and fuel prices will decline another 11% in 2023 but it will stillWhile that does not sound very encouraging, the problem is much worse in developing economies.
Further, nearly 90% of these economies have recorded a larger increase in wheat prices in local-currency terms compared to the rise in U.S. dollars. It’s about to get worse. These emerging economies need to “get ready for a period of even higher volatility in global financial and commodity markets,"Ayhan Kose, Director of the World Bank’s Prospects Group and EFI Chief Economist, writes. In the U.S., the World Bank has predicted that energy prices will decline by 11% in 2023 after surging 60% in the current year following Russia's invasion of Ukraine.