IMF, World Bank rally nations to tackle Middle East war’s economic fallout

The world’s leading financial, trade and energy institutions have appealed for closer international collaboration to reduce the economic disruption caused by the conflict in the Middle East.

The appeal followed a meeting of their high-level coordination group on 7 July, with a joint statement released on Wednesday by the International Energy Agency, the International Monetary Fund, the World Bank Group and the World Trade Organisation.

The coordination group, created in April, was established to align global responses to the conflict’s impact on energy markets, international trade and economic stability.

In the statement, the organisations said they had reviewed recent developments and discussed ways of supporting countries most exposed to the crisis.

“We met to take stock of energy, trade, and economic developments, to discuss the situation in vulnerable countries, and to further coordinate our support to those in need.

“The global economy has been broadly resilient to the shock from the war in the Middle East, even as some economies have experienced a slowdown in growth and an uptick in inflation.

“Overall, the impact has been highly uneven, affecting energy supplies, food security, various commodities, and economic activity across many countries and regions and creating deeper concerns about growth and price stability.”

While noting that prices of fuel and fertiliser had eased since their previous meeting in June, the institutions warned that the uncertainty surrounding the conflict remained significant and that its effects could persist.

“Energy markets and transit of goods are still facing strains,” they said.

The organisations also stressed the need for renewed diplomatic efforts to end the conflict and restore shipping through the Strait of Hormuz, describing secure maritime routes as essential to global trade and energy supplies.

They urged governments and international partners to work together to protect freedom of navigation in the Strait of Hormuz and other strategic sea lanes.

The institutions further recommended policies aimed at supporting economic recovery, preserving jobs, strengthening food and energy security, improving port infrastructure, facilitating trade and increasing resilience against future global shocks.

Reaffirming their commitment to continued cooperation, they said they would keep monitoring developments closely and adjust their support where necessary.

“We will strengthen our readiness to act further if needed and will continue adapting our support to countries as the situation evolves.

“This includes helping them build greater energy, food, trade, and economic resilience,” they said.