Inflation and other factors, such as the Russian invasion of Ukraine, will no longer cause Kenyans to pay greater prices for goods.
In its Commodity Markets Outlook report dated October 2022, the World Bank underlined that prices for necessities and other services will decline in 2023.
Despite the decline, several of the essential products may see an increase in demand the following year. Prices could remain at 2022 levels if supply is low.
Fuel prices started to drop from their peak after the post-pandemic demand spike, and the Ukrainian war shifted their costs.
However, conflicting trends and various supply situations will cause fuel prices to slightly drop in 2023. In 2024, fuel prices are anticipated to stabilize further as global currencies start to do the same.
According to the World Bank research, "After rising by an anticipated 60% in 2022, energy prices are predicted to drop by 11% in 2023 and another 12% in 2024.
The research went on to say, "Slower global growth and a decline in demand for natural gas as households and businesses consume less of it are two major factors influencing the estimate.
Transport and Electricity
The cost of power and transportation is expected to decline in 2023, according to the World Bank. They attributed the cost retreat to a reduction in fuel prices and currency stabilization.
"The situation is precarious in many ways, especially in terms of supply.
The report did, however, issue the following caution: "First, production in the United States could disappoint if producers choose returning cash to shareholders over increasing output, and rising input costs constrain new investment."
The cost of tokens has increased over the last two months as a result of assessments made by the Energy Petroleum and Regulatory Authority (EPRA).
In 2023, agricultural prices were forecasted to drop by 5% before leveling off in 2024.
The higher-than-expected global wheat harvest, consistent rice market supply, and the return of Ukrainian grain exports are all contributing factors to the projected dip in 2023.
Russia and Ukraine are two significant grain exporters, and the World Bank projected that interruptions in their exports "may again halt world supply, as they did in the early stages of the war in Ukraine."
According to the report, President William Ruto will fulfill his promise to cut Unga costs in a year.
Gas and Coal
Prices for coal and natural gas are expected to decrease in 2023 and 2024, but even then, they are still expected to be much higher than they were before the pandemic.
Prices are anticipated to decrease next year as a result of a decrease in demand for natural gas as families and companies use less of it and switch to alternatives.
Additionally, it is projected that coal production will increase as China, India, and seaborne exporters increase output.
The adjustments are expected to have an effect on the country's gas prices, which began to rise dramatically in April 2022.
The analysis indicated that the need for food will increase. The crisis in Ukraine and other natural disasters that have caused severe food shortages were both cited by the World Bank as contributing factors to the increase in demand.
The study found that if the anticipated upside risks to food prices materialized, it might lead to even higher increases in the number of people who are food insecure.
According to the analysis, the price of metals used in the building industry will decrease. The boost in demand will cause the metal refiners to increase manufacturing costs, which will raise the overall cost.
One upside risk that could result in greater production costs for metal refiners is higher-than-expected energy prices.
The World Bank, however, forecast that over the long run, there will be an increase in metal demand because of recent government attempts to hasten the energy transition and support renewable energy sources, both of which call for a lot of metals.
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