Global outlook c h a p t e r 1

A. Global financial conditions
B. EMDE debt flows and credit 
spreads
C. Capital flows to EMDEs
D. EMDE exchange rate depreciations
due to the prolonged impact of the pandemic
on global oil demand (figure 1.6.A; World Bank 
2020c). Crude oil prices averaged $41/bbl in 
2020, a 34 percent fall from 2019. Oil demand 
fell 9 percent last year—the steepest one-year 
decline on record—as a result of pandemic-control 
measures and the associated plunge in global 
demand, which was partly offset by histori- 
cally large production cuts among OPEC+ 
(Organization of the Petroleum Exporting 
Countries, as well as Russia and other non-OPEC 
oil exporters; figure 1.6.B). Oil prices are forecast 
to remain close to current levels and average $44/
bbl in 2021 before rising to $50/bbl in 2022. The 
main risk to this forecast relates to the evolution of 
the pandemic, with oil demand particularly 
susceptible to lockdown measures and reduced 
mobility; however, positive vaccine news has 
reduced this risk somewhat.
Base metal prices were, on net, broadly flat in 
2020, as sharp falls in the first half of the year 
were followed by a strong recovery in the second 
half due to rising demand from China (figure 
1.6.C). Prices are expected to increase 5 percent in 
2021 alongside the expected rebound in global 
demand. Agricultural prices rose 4 percent in 
2020, largely driven by supply shortfalls and 
stronger-than-expected demand in edible oils
and meals. Some regions experienced localized 
food price spikes, and a decline in household 
incomes—particularly among the poorest popu-
lations—has increased the risk of food insecurity 
(figure 1.6.D). Agricultural prices are forecast to 
see a further modest increase in 2021. 
Major economies: