IMF Prepares $50bn Aid For Vulnerable Economies Hit By Iran War

The International Monetary Fund (IMF) is preparing to provide between $20 billion and $50 billion in immediate balance-of-payments support to vulnerable countries affected by the ongoing Middle East war, its managing director, Kristalina Georgieva, has said.

Georgieva warned that the conflict, which began on February 28 with US and Israeli actions against Iran, is likely to leave lasting economic scars even if the fragile ceasefire holds.

“Given the spillovers of the Middle East war, we expect near-term demand for IMF balance-of-payments support to rise to somewhere between $20 billion and $50 billion, with the lower bound prevailing if the ceasefire holds,” Georgieva said in prepared remarks.

She added that disruptions to transport and supply chains have already triggered food insecurity that could affect at least 45 million people. “Even in a best case, there will be no neat and clean return to the status quo ante,” she noted.

Speaking at the IMF and World Bank’s annual Spring Meetings in Washington, Georgieva said the Fund will revise downward its global growth forecast for 2026 due to surging energy costs, damaged infrastructure, supply disruptions, and eroded market confidence.

She highlighted the “asymmetric” impact of the crisis, noting that low income energy-importing countries with limited fiscal space are being hit hardest.

“Spare a thought for the Pacific Island nations at the end of a long supply chain, wondering if fuel will still reach them in the wake of such a severe disruption,” she said.

On Wednesday, the World Bank reported that economic growth across the Middle East, excluding Iran, is now projected to slow sharply to just 1.8 percent in 2026, down from 4 percent the previous year, a downgrade of 2.4 percentage points since the war began.

The conflict has caused oil prices to surge and snarled global supply chains, especially after Iran effectively blocked the Strait of Hormuz.

The IMF is also expected to raise its global inflation forecast due to higher energy and fertilizer costs.

In a joint statement issued after a meeting with the World Bank and World Food Programme, the three institutions warned that sharp rises in oil, gas, and fertilizer prices, combined with transport bottlenecks, will drive up food prices and worsen food insecurity, particularly in low-income countries.

The IMF and World Bank have set up a coordination group to address energy market impacts from the war, with a high-level meeting scheduled for Monday.

Georgieva emphasised that countries directly involved in fighting typically see output drop by around 3 percent initially, with effects lingering for years.

The remarks come as talks aimed at turning the two-week US-Iran ceasefire into a more permanent agreement are set to continue this weekend.