IMF and World Bank $150B

The International Monetary Fund and World Bank said they can mobilize up to $150 billion for countries hit hardest by the latest energy shock. (imf.org) (business-standard.com) The pledge emerged from the Spring Meetings in Washington after the IMF, World Bank and International Energy Agency set up a joint coordination group on April 1, 2026. That group said the war in the Middle East had disrupted oil, gas and fertilizer supplies and hit energy importers hardest, especially low-income countries. (imf.org)) By April 13, the three institutions said shipping through the Strait of Hormuz had still not normalized and that fuel and fertilizer prices could stay high even after traffic resumed. They said shortages were spilling into food production, jobs, tourism and other industries. (imf.org)) The money is meant to cushion an external shock, not solve the deeper financing problems many borrowers already had before oil and gas prices jumped. An IMF policy paper published in February 2025 said many emerging markets and developing economies were already facing elevated debt vulnerabilities, rising debt-service costs and shrinking room for development spending. (imf.org)) That financing gap is especially acute for poorer countries that need concessional loans, which are cheaper and longer-term than market borrowing. The IMF says its Poverty Reduction and Growth Trust provides zero-interest loans for eligible low-income countries, underscoring how different that funding is from standard crisis lending. (imf.org)) World Bank officials have spent the past two years trying to stretch the institution’s balance sheet so it can lend more without a capital increase. The bank says changes since 2023 have increased International Bank for Reconstruction and Development financing capacity by at least $50 billion over the next decade, while private-capital mobilization reached $69 billion in fiscal 2025. (worldbank.org)) The immediate problem at the meetings was more basic: governments wanted enough liquidity to keep importing energy and avoid broad fuel subsidies that blow holes in budgets. Reuters reported that IMF and World Bank officials warned countries against hoarding oil and against “expensive and untargeted” subsidies as prices surged. (business-standard.com)) The IMF’s own growth forecasts were already slipping as the meetings ended. Reuters reported that the Fund cut its 2026 global growth forecast to 3.1% in its most optimistic scenario and then said the outlook was already drifting toward a more adverse 2.5% scenario as new attacks on shipping undermined hopes of a quick recovery in energy flows. (business-standard.com))