The International Monetary Fund (IMF) has indicated it may need to provide up to $50 billion in urgent financial support to countries affected by the Middle East conflict, warning of prolonged economic consequences.
“Given the spillovers of the Middle East war, we expect near-term demand for IMF balance-of-payments support to rise to somewhere between $20 billion and $50 billion, with the lower bound prevailing if the ceasefire holds,” said Kristalina Georgieva, according to prepared remarks shared with AFP.
She added that disruptions to transport and supply chains could worsen food insecurity, potentially affecting at least 45 million people.
“Even in a best case, there will be no neat and clean return to the status quo ante,” she said, as a fragile ceasefire appeared to be holding.
Georgieva made the remarks while opening the annual Spring Meetings jointly organised by the IMF and the World Bank in Washington, which convene leading global economic policymakers.
The war—triggered by the United States and Israel’s offensive against Iran on 28 February—has destabilised the Middle East, disrupted global supply chains, and driven up oil prices after Tehran effectively restricted access through the Strait of Hormuz.
Although a ceasefire is in place, tensions persist, with both Tehran and Washington accusing each other of violations, while further talks aimed at securing a lasting peace are expected.
The IMF is set to downgrade its global growth forecast for 2026, citing the economic fallout of the conflict. Rising energy costs are expected to weigh heavily on vulnerable economies.
Georgieva noted that even under the Fund’s “most hopeful scenario,” damage to infrastructure, disrupted supply chains, and declining market confidence would leave lasting “scarring effects” on global growth.
She emphasised the uneven impact of the crisis, with low-income, energy-importing countries facing greater challenges due to limited fiscal capacity.
“Spare a thought for the Pacific Island nations at the end of a long supply chain, wondering if fuel will still reach them in the wake of such a severe disruption,” she said.
Meanwhile, the World Bank reported that the Middle East has suffered a “serious and immediate economic toll” from the conflict. Excluding Iran, regional growth is projected to slow to 1.8 per cent in 2026, down from four per cent the previous year.
Global inflation is also expected to rise, driven by higher oil prices and supply chain disruptions linked to the war.
In response, the IMF, World Bank, and the World Food Programme have held discussions in Washington on the economic and food security implications of the crisis.
“Sharp increases in oil, gas, and fertiliser prices, together with transport bottlenecks, will inevitably lead to rising food prices and food insecurity,” a joint statement from the meeting said.
The IMF and World Bank have additionally established a coordination group to address disruptions in energy markets, with a high-level meeting scheduled.
In a recent report, the IMF highlighted the broader economic costs of conflict, estimating that economic output in countries directly affected by war typically falls by three per cent initially and continues to decline over time.
It also warned that disruptions to fertiliser supply chains could further aggravate global food insecurity, particularly in low-income countries already facing reduced levels of external support.