IMF/WB $150B energy plan

The International Monetary Fund and World Bank said they would mobilize an additional $150 billion for countries hit by the latest energy shock. (thecorner.eu) The pledge emerged from the Spring Meetings in Washington after officials spent the week assessing how the Middle East war had driven up oil, gas and fertilizer prices and disrupted shipping through the Strait of Hormuz. The International Energy Agency, IMF and World Bank said on April 13 that the shock was hitting energy importers hardest, especially low-income countries. (imf.org) Reuters reported that the IMF and World Bank package would total up to $150 billion in new financing for developing countries most exposed to the price spike and supply crunch. IMF Managing Director Kristalina Georgieva said on April 15 that at least a dozen countries were already expected to seek new IMF programs. (money.usnews.com 1) (money.usnews.com 2) The move pushes two multilateral lenders better known for long-term development and balance-of-payments support deeper into short-term crisis management. The World Bank had previously said in October 2023 that internal reforms could unlock $157 billion in extra lending capacity over a decade, but this package is aimed at a much faster emergency need. (worldbank.org) (thecorner.eu) The pressure is falling on countries that import fuel and already have little budget room. The IMF said the war-driven shock was raising inflation, weakening external balances and narrowing policy options across emerging Asia, while its baseline forecast assumed the disruption would prove temporary. (imf.org) The shock is also spilling beyond power bills. The World Bank said the conflict could push 45 million additional people into acute hunger by mid-2026, with urea prices jumping nearly 46 percent between February and March as fertilizer flows were disrupted. (worldbank.org) IMF officials have also been warning governments against broad fuel subsidies as a response. Rodrigo Valdes, the Fund’s fiscal affairs chief, said countries should use targeted and temporary cash support instead of price caps that keep demand high when supplies are short. (money.usnews.com) Georgieva said the financing need the IMF was tracking on April 15 was still preliminary at $20 billion to $50 billion for Fund support alone, and she warned supply bottlenecks would last even if the conflict eased quickly because tanker routes take weeks to normalize. The $150 billion headline now gives governments a clearer signal that the two institutions are preparing for a longer energy and financing squeeze, not a brief market jolt. (money.usnews.com) (thecorner.eu)