(April 2): The International Monetary Fund (IMF), the World Bank Group and the International Energy Agency said they’ll work together to respond to the economic fallout of the Iran war.
The organisations agreed to share data, coordinate policy advice, and mobilise relevant stakeholders to support countries in need, according to the joint statement issued Wednesday. They will also assess countries’ potential financing needs.
“The impact is substantial, global, and highly asymmetric, disproportionately affecting energy importers, in particular low-income countries,” according to a statement from the heads of the three institutions.
The conflict in the Middle East has disrupted global supply chains and squeezed some developing economies, driving up oil, gas and fertiliser prices while raising concern about food inflation. Brent crude was trading around US$100 a barrel on Wednesday, roughly 40% higher than before the US-Israeli attack against Iran on Feb 28.
Supply chains for helium, phosphate, aluminium and other commodities have also been affected, the leaders noted, as has flight travel.
Beyond the energy disruption, higher food and fertiliser prices are affecting some countries from the Middle East to Latin America, with low-income economies at risk of food insecurity, the IMF warned in a blog post on Monday. The interruption of crop-nutrient supplies from the Gulf comes just as planting season begins in the northern hemisphere, threatening harvests through the year.
See also: US to set 25% tariff on finished steel, aluminum goods, WSJ says
The conflict and its economic impact are sure to be a key topic when policymakers gather for the spring IMF-World Bank meetings April 13-18.
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