The World Bank could mobilize between $80 billion and $100 billion over the next 15 months to support countries severely affected by the war in the Middle East, its president Ajay Banga said on Tuesday.
The proposed funding would exceed the roughly $70 billion the bank deployed during the COVID-19 pandemic. Banga said $20 billion to $25 billion could be made available in the coming months through a crisis response window, allowing countries to access up to 10% of funds from existing programs earlier than planned.
A further $30 billion to $40 billion could be unlocked within about six months by restructuring current programs, he added.
Speaking on the sidelines of the spring meetings of the International Monetary Fund and the World Bank, Banga highlighted growing concern over the war’s impact on global growth and inflation, with developing economies expected to bear the brunt.
The IMF has already downgraded its global growth outlook, citing war-driven spikes in energy prices. It said that without the conflict, growth projections would have been slightly higher at 3.4%.
Banga noted that if the conflict persists and financial needs increase, the bank may tap its balance sheet to expand support toward the upper end of the $80 billion to $100 billion range, in addition to its regular lending.
“We’re building a tiered response toolkit to ensure we have sufficient capacity to respond as the situation evolves,” he said.
Banga also warned that energy markets may take time to stabilize, even if the conflict ends soon, due to potential long-term damage to infrastructure.
In separate remarks, IMF Managing Director Kristalina Georgieva said the global economy could recover quickly if the war ends in the coming weeks, but cautioned that a prolonged conflict would worsen the outlook.
She added that the IMF is in discussions with countries most affected by rising energy costs and supply chain disruptions to assess their financing needs.
Both Banga and Georgieva urged governments to adopt targeted, temporary measures to cushion the impact of higher energy prices, warning that broad subsidies could further fuel inflation.
Source: Reuters
