IMF expects to provide vulnerable economies hit by Iran war up to $50 bn

IMF Projects Up to $50 Billion in Financing for Economies Affected by Middle East Conflict

The International Monetary Fund expects to provide between $20 billion and $50 billion in balance-of-payments support to countries facing economic effects from the Middle East conflict, Managing Director Kristalina Georgieva said on Thursday. The lower end of the range would apply if the current ceasefire remains in place.

Georgieva made the remarks in prepared statements released ahead of the IMF and World Bank Spring Meetings in Washington. She noted that transport and supply-chain disruptions have contributed to food insecurity expected to affect 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, citing infrastructure damage, supply interruptions, and reduced market confidence as factors that would constrain growth below previous projections.

The conflict began on February 28 and has involved U.S., Israeli, and Iranian forces. It has disrupted shipping through the Strait of Hormuz, where Iranian actions restricted transit, and has contributed to higher oil prices. Ceasefire talks are scheduled for Saturday. Both Tehran and Washington have accused the other side of violations.

The IMF plans to lower its 2026 global growth forecast because of elevated energy costs and supply shocks. Georgieva described the effects as asymmetric, with low-income energy importers possessing limited fiscal space facing larger impacts. She cited Pacific Island nations dependent on extended supply routes as particularly exposed to fuel shortages.

On Wednesday the World Bank reported that economic growth in the Middle East, excluding Iran, is projected to slow to 1.8 percent in 2026 from 4 percent in the prior year, a reduction of 2.4 percentage points relative to pre-conflict estimates. The assessment incorporated damage from Iranian strikes on Gulf targets and Israeli operations in Lebanon. The IMF is also expected to raise its global inflation projection because of higher oil, gas, and fertilizer prices together with transport constraints.

The heads of the IMF, World Bank, and World Food Programme met this week to review food-security and energy-market consequences. Their joint statement said sharp increases in commodity prices and logistics bottlenecks would raise food costs and insecurity. The IMF and World Bank have established a coordination mechanism on energy issues, with a senior-level session set for Monday.

The IMF’s latest analysis of conflict effects estimates that output in directly affected economies falls by about 3 percent initially and remains lower for several subsequent years. A separate assessment of the present conflict stated that fertilizer supply disruptions would add pressure on food production, with low-income countries at elevated risk and potentially requiring additional external financing at a time when such flows have declined.

The Fund will also publish its annual Fiscal Monitor during the meetings, which is anticipated to note higher government debt levels in countries responding to successive economic shocks.