We expect most commodity prices to drift lower in the near term as advanced economies enter mild recessions and financial market risk aversion persists. A stronger US dollar will also weigh on prices. However, later in the year, prices should start to revive as the US Federal Reserve and central banks in many emerging economies start to cut interest rates, which will prompt optimism about a pick-up in economic activity and commodity demand. What’s more, while growth in China's economic activity may have peaked in Q1, we expect its residential property sector to revive a little in the second half of this year, which is positive for metals prices.
We think the worst of the energy crisis is now behind us, but we still think that most energy prices will rise a little in the run-up to the 2023/24 winter as supply will remain relatively constrained. We forecast that energy prices will fall more markedly in 2024 as supply bottlenecks ease and China’s economy slows.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services