US-Israeli war against Iran will dominate IMF and World Bank meetings — Jerusalem Post
The annual meetings of the International Monetary Fund and the World Bank, to be held in Bangkok, Thailand, this week, will take place against the backdrop of the US-Israeli war against Iran, an energy shock, and rising interest rates. According to the Jerusalem Post, the conflict, now in its eighth month, as well as the inflation and economic hardship caused by it, will be key topics in talks among financial officials from different countries.
The IMF and World Bank meetings are being held outside Washington for the first time in three years. US Treasury Secretary Scott Bessent will not attend: according to a US official, he assigned two senior officials to represent the country due to domestic affairs. He is also expected to be absent from the G20 meeting, which the United States chairs this year.
Pressure on energy markets
World Bank President Ajay Banga told Reuters that the global economy had proved more resilient than expected after Iran closed the Strait of Hormuz, through which about 20% of global oil supplies pass. At the same time, sharp increases in diesel fuel prices, rising fertilizer costs, and the projected impact of a super El Niño are creating new pressure.
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The G7 countries agreed to release 100 million barrels of diesel fuel and oil from emergency reserves. US President Donald Trump also announced an agreement with Russia, an aggressor state, providing for additional diesel fuel supplies to the global market and a temporary exemption from US sanctions intended to limit Moscow's revenue from the war against Ukraine. Ukrainian President Volodymyr Zelenskyy criticized the decision.
Debt and risks for developing countries
The IMF maintains its forecast for global economic growth at 3% in 2026 and may slightly raise its estimate for the following year. At the same time, the fund expects forecasts to worsen for certain states, including Ukraine and Persian Gulf countries that have suffered Iranian strikes and reduced energy exports.
Public debt will be a separate problem for participants in the meetings. According to the IMF, global public debt will exceed 100% of global GDP by 2030. Developing countries are particularly vulnerable due to high rates, capital outflows, and the need to refinance debt on more expensive terms. On average, interest payments already exceed 10% of government revenue in such countries.
