Commodity market disruptions, growth and inflation

Key takeaways

• Higher commodity prices will erode global growth, as the modest growth boost for commodity exporters will only partly offset the output losses of commodity importers.
• Rising commodity prices will also intensify global inflationary pressures. The effects will be strongest for food and energy prices, but spillovers to other components of inflation are likely.
• Recent shocks have been smaller than the 1970s oil shocks but broader-based, encompassing food and industrial commodities as well as energy. Nonetheless, structural changes, as well as stronger policy frameworks and nominal anchors, make stagflation less likely to return.

The views expressed in this publication are those of the authors and not necessarily those of the BIS.