The World Bank has boosted its forecast for global oil prices by 10pc for 2016 but at the same time warned that commodity prices will remain well below last year’s levels inflicting further pain on resource-rich countries.
In January the World Bank pointed to a price of $37 a barrel for the benchmark oil price but in its latest quarterly report raised the forecast to $41 due to “improving sentiment and a weakening dollar”.
The World Bank still expects all energy prices – including oil, natural gas and coal – to remain heavily depressed compared to last year, but has revised down its January prediction of a 24.7 percent slide to a 19.3 percent fall compared to 2015.
The bank said that the global commodities slump spells trouble for resource-rich nations which enjoyed a surge in investment during the commodities market boom of the 2000s.
However, the World bank issued this stern warning:
“Countries that have borrowed and invested heavily in anticipation of faster growth may struggle to service their debt and sustain investment when growth disappoints as a result of lower commodity prices,” the World Bank warned.
It can be recalled that Nigeria’s economic growth has slumped, which indicates effects of the warning issued by the world bank.
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