A NEW World Bank report, Commodity Markets Outlook for 2023, expects global prices to decline this year at the `fastest clip` since the onset of Covid-19 on the back of dimming global demand and growth prospects, slowing manufacturing activity amid softer consumer demand, and weaker capital investment due to high borrowing costs and recession concerns. This should ease pressure on the current account of net importers of energy, food and industrial raw material, such as Pakistan. But it would also cloud the growth prospects of almost two-thirds of the developing economies that depend on commodity exports. Pakistan`s textile and other commodity exports will also take a hit, owing to the drop in international commodity prices, as reflected in the recent large fall in the value of the textile industry`s overseas shipments. But that loss will be more than compensated for by the reduction in the dollar value of imports, somewhat easing our current account difficulties. The report points out that the surge in food and energy prices after Russia`s invasion of Ukraine has largely passed due to slowing economic growth, a moderate winter and reallocations in the commodity trade. Despite the expected declines, however, the prices of all major commodity groups will remain well above 2015-2019 levels. In real terms, food prices will remain at one of the highest levels of the past five decades.

The decline in global commodity prices is good news for Pakistan, which is struggling to deal with a difficult balance-ofpayments situation, triggered in part by a major surge in its import bill thanks to an unprecedented rise in the energy and food markets post-Covid and worsened by the Ukraine war. The falling world commodity prices may also curb imported inflation and slow domestic price growth. But it will not help the domestic economy grow a bit faster, provide relief to the lower-middleand middleclass consumers or revive private investment. Take the current account surplus of $654m posted last month, the highest monthly surplus in eight years. In happier times, it would have been cause for celebration. But not now as the surplus has been achieved by choking the economy and restricting the legitimate repatriation of profits, sales and dividends by foreign investors. Islamabad must start taking the needed decisions to restore its credibility internationally and be serious about putting its house in order.