IEA, IMF, World Bank warn of monetary tightening and weaker growth

The heads of the International Energy Agency, International Monetary Fund, and World Bank have agreed to form a coordination group to maximise their institutions’ response to the energy and economic impacts of the war in the Middle East.

The Middle East war has caused major disruptions to lives and livelihoods in the region and triggered one of the largest supply shortages in global energy market history. “The resulting market volatility, weakening of currencies in emerging economies, and concerns about inflation expectations raise the prospect of tighter monetary stances and weaker growth,” they added.

To offer a coordinated response, the organisations will: assess the severity of impacts across countries and regions, coordinate a response mechanism that may include targeted policy advice, assessment of potential financing needs and support and use of risk mitigation tools.

The group also aims to mobilise stakeholders, including multilateral, regional, and bilateral partners, to deliver a coordinated and efficient support to countries in need.