Kenyans will no longer have to pay higher costs for goods as a result of inflation and other circumstances like the Russian invasion of Ukraine.
The World Bank emphasized that the cost of essential goods and other services will fall in 2023 in its Commodity Markets Outlook report from October 2022.
Despite the fall, demand for some of the important products could rise again the following year. Low supply could keep prices at 2022 levels.
In the wake of the post-pandemic demand boom, gasoline prices began to decline from their high, and the war in Ukraine redirected its expenses.
However, different supply conditions and contrasting trends will force fuel prices to modestly decline in 2023. Fuel costs are expected to stabilize further in 2024 as currencies throughout the world also begin to stabilize.
The World Bank report stated, in part, "Energy prices are forecast to decrease 11% in 2023 and another 12% in 2024, after soaring by an expected 60% in 2022.
The report continued, "Key drivers of the projection include slower global growth and decreased natural gas demand as families and business cut use.
Transport and Electricity
The World Bank predicted that in 2023, the cost of transportation and power would decrease. They cited a decline in fuel prices and currency stabilization as the causes of the cost retreat.
"There are several uncertainties to the picture, particularly on the supply side.
However, it issued a warning: "First, production in the United States could disappoint as producers favor returning cash to shareholders over boosting output, and rising input costs restrain new investment."
As a result of evaluations carried out by the Energy Petroleum and Regulatory Authority, the price of tokens has grown during the past two months (EPRA).
It predicted that agricultural prices would fall by 5% in 2023 before leveling off in 2024.
The projected fall in 2023 is due to a higher-than-anticipated global wheat harvest, stable rice market supply, and the restart of Ukrainian grain exports.
The World Bank predicted that interruptions in exports from Russia or Ukraine, two major grain exporters, "may again halt world supply, as they did in the early stages of the war in Ukraine."
The report is consistent with President William Ruto's pledge to reduce Unga costs within a year.
Gas and Coal
Although coal and natural gas prices are predicted to decline in 2023 and 2024, they are still likely to be significantly higher than their pre-pandemic averages.
Due to decreased demand for natural gas as homes and businesses reduce their usage and move to alternatives, prices are predicted to decline next year.
Additionally, as China, India, and seaborne exporters improve output, coal production is anticipated to rise.
The changes are anticipated to have an impact on the nation's gas prices, which sharply climbed starting in April 2022.
The analysis predicted a rise in food market demand. The World Bank linked the rise in demand to the conflict in Ukraine as well as other natural disasters that have resulted in extreme food insecurity.
According to the research, "materialization of the upside risks to food prices identified could result in even greater increases in the number of individuals experiencing food insecurity."
The analysis predicts a price decline for metals used in the construction sector. The metal refiners are prepared to raise production costs in response to the surge in demand, which will impact the total cost.
Higher-than-anticipated energy prices are one upside risk, which could result in higher production costs for metal refiners.
However, the World Bank predicted that over the longer term, metal demand will rise due to recent government initiatives to quicken the energy transition and promote renewable energy sources, which require a lot of metals.
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