The International Monetary Fund (IMF) has warned that it may need to provide up to $50 billion in emergency financial assistance to countries affected by the escalating Middle East conflict, citing severe spillover effects on global economic stability.
IMF Managing Director Kristalina Georgieva said on Thursday that demand for balance-of-payments support could rise significantly in the near term as countries struggle with rising energy costs, disrupted supply chains, and weakened investor confidence.
“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,” she said in prepared remarks shared with AFP. “Even in a best case, there will be no neat and clean return to the status quo ante.”
Georgieva noted that the crisis is already having far-reaching humanitarian consequences, with at least 45 million people expected to face heightened food insecurity due to transport disruptions and supply chain breakdowns.
The remarks were delivered at the start of the IMF and World Bank Spring Meetings in Washington, D.C., where global policymakers are assessing the economic fallout of the conflict.
The war — which began with hostilities between United States-backed forces and Iran — has destabilised parts of the Middle East, pushing up oil prices and disrupting key global shipping routes, including the Strait of Hormuz.
Georgieva warned that the impact of the crisis will not be evenly distributed, with low-income, energy-importing nations facing the harshest consequences due to limited fiscal capacity.
“Spare a thought for the Pacific Island nations at the end of a long supply chain,” she said, highlighting concerns over fuel availability and transportation costs.
The World Bank has also projected a significant slowdown in regional growth, estimating that Middle East economic expansion could fall to 1.8 per cent in 2026 from 4 per cent the previous year, representing a sharp downgrade from pre-war forecasts.
Officials from the IMF, World Bank, and the World Food Programme recently met in Washington to assess worsening food security risks, warning that rising oil, gas, and fertiliser prices will likely push global food inflation higher.
The IMF also indicated that it will revise global growth projections downward and raise inflation forecasts in response to the ongoing shocks.
As part of its broader analysis, the Fund reiterated that conflicts typically have long-lasting economic effects, with output in war-affected countries often declining for years after hostilities begin.
A coordinated response framework between the IMF and World Bank is expected to be strengthened in the coming weeks as global leaders seek to manage the widening economic fallout.
