IMF, World Bank pledge support as Iran war drives fertiliser surge, food security concerns

THE International Monetary Fund and the World Bank Group have assured member nations of support amid the economic fallout from the Middle East conflict, as rising oil, gas, and fertiliser prices fuel concerns over food security and employment.

The pledge followed a joint meeting with the International Energy Agency on Monday, held during the ongoing IMF-World Bank Spring Meetings in Washington, DC.

According to a joint statement, the meeting forms part of a coordination platform set up in early April to strengthen collective responses to the war’s economic and energy-related disruptions. It also precedes the release of the IMF’s World Economic Outlook (WEO) report.

Tensions escalated on February 28 when Iran launched retaliatory strikes on US military bases across the Middle East, with explosions reported in cities including Abu Dhabi, Manama, Doha, Kuwait, and Riyadh. The move came after a joint missile attack on Iran by the United States and Israel.

READ ALSO: Trump renews threat to Iran’s power plants as war escalates

Now in its sixth week, the conflict has significantly disrupted economic activity across the region, with ripple effects being felt globally.

Energy markets have been particularly affected, as oil and gas prices surged sharply following attacks on production infrastructure and disruptions to shipments through the Strait of Hormuz.

While Nigeria stands to benefit from higher crude prices as a major oil producer, the spike has also driven up transport costs, worsening living conditions in Africa’s largest economy.

During the meeting, the institutions reviewed the situation in the hardest-hit countries and assessed policy responses, noting that uncertainty remains high, particularly as shipping activities through the Hormuz route have yet to fully recover.

They warned that even when normal shipping resumes, global supply chains for key commodities may take time to stabilise. Damage to infrastructure could keep fuel and fertiliser prices elevated for an extended period.

The organisations added that ongoing supply disruptions are likely to trigger shortages of critical inputs, with broader implications for energy, agriculture, and industrial sectors.

They also highlighted the humanitarian and economic toll of the conflict, including displacement, job losses, and a decline in travel and tourism.

“The impact of the war is significant, global, and uneven, with energy-importing and low-income countries bearing the brunt,” the statement noted.

It further stressed that price shocks in oil, gas, and fertiliser markets are heightening risks to food security and employment, even as some energy-producing nations in the Middle East face steep declines in export revenues.

READ ALSO: Oil climbs above $110 as Iran war tightens global supply

The IMF and World Bank said their teams are actively working with affected countries, offering tailored policy guidance and financial assistance where necessary.

They also pledged to continue monitoring global energy markets and economic conditions, while coordinating with international partners to support recovery efforts aimed at restoring stability, growth, and jobs.

Separately, the IMF signalled plans to lower its global growth forecast in the coming World Economic Outlook report, warning that the ongoing conflict could intensify inflationary pressures and further weaken the global economic outlook.