As the U.S.-Iran conflict continues to date, 12 countries have already 'reached their breaking point'.

The war's 'bill' is spreading globally. From April 15 to 16, during the IMF and World Bank Spring Meetings held in Washington, two pieces of news emerged simultaneously, jointly illustrating the intensity of the Middle East conflict’s impact on the global economy. According to media reports, IMF Managing Director Kristalina Georgieva stated at a press conference that at least 12 countries have approached the IMF for new loan programs to cope with soaring energy prices and supply-chain disruptions caused by the Middle East war—including several sub-Saharan African nations. She estimated that this war could trigger $20–50 billion in new financing needs, covering both new loans and expansions of existing financing programs for 39 countries. Meanwhile, other media reports quoted Indian officials characterizing this shock as 'potentially as disruptive as the COVID-19 pandemic six years ago,' warning that even if hostilities end soon, normalization of energy supplies could still take years. IMF: 'Supply shocks will not vanish overnight' IMF Managing Director Georgieva’s wording was direct and stark: 'Even if the war ends tomorrow, the impact of supply disruptions will not vanish overnight… Why? Because tankers are slow-moving vessels—traveling from the Persian Gulf to Fiji takes 40 days.' In the coming weeks, the impact of supply disruptions will only deepen. The blockade of the Strait of Hormuz lies at the heart of the crisis. This strait serves as a critical conduit for global oil, natural gas, naphtha, helium, and fertilizer—and Asian countries rely heavily upon it. Georgieva warned that even if the conflict ends swiftly, physical supply-chain fractures will be difficult to repair rapidly. Christian Mummsen, IMF Strategy Department Director, added that the 12 countries represent only a preliminary count: 'We are still taking stock—the list is very likely to expand.' He also noted that delays or cancellations in fertilizer shipments are severely damaging developing countries, with some estimates suggesting an additional 45 million people will face food insecurity. On fiscal policy, the IMF explicitly opposes broad-based energy subsidies. Rodrigo Valdes, IMF Fiscal Affairs Department Director, bluntly stated at the press conference: 'If you try to offset a supply shock by stimulating demand, you’ll only end up with higher inflation.' The IMF recommends that countries instead provide targeted, temporary cash transfers to the most vulnerable populations—not suppress fuel prices. Global growth forecast: 'Drifting' toward worse scenarios The IMF has already downgraded its 2026 global growth forecast to 3.1%, but this figure itself assumes a 'rapid end to the conflict and subsequent decline in oil prices.' IMF Chief Economist Pierre-Olivier Gourinchas candidly admitted that the global economy is currently 'drifting' away from this baseline forecast toward a more adverse scenario—in which 2026 global growth would fall to 2.5%, with average annual oil prices hovering around $100 per barrel. The worst-case 'severe scenario' is even more extreme: if the conflict intensifies further, global growth could drop to 2%, approaching the brink of a global recession. On monetary policy, the IMF’s stance is 'remain vigilant—but do not act hastily.'

IMF: Global debt to exceed GDP by 2029

The International Monetary Fund has warned that global public debt will surpass global GDP two years earlier than previously anticipated. The U.S. debt trajectory has been explicitly labeled 'unsustainable,' significantly heightening the urgency of global fiscal consolidation. IMF Managing Director Kristalina Georgieva, speaking on April 20 in New York at an economic forum hosted by the Qatari government, stated that countries’ actions to strengthen their fiscal positions remain far insufficient. According to Bloomberg, she noted that the IMF’s latest forecast shows global public debt will exceed 100% of global GDP in 2029—two full years earlier than previously projected—driven primarily by rapidly rising government borrowing in the United States and elsewhere. Regarding U.S. fiscal issues, Georgieva said she had held dedicated discussions with U.S. Treasury Secretary Scott Bessent, and both sides acknowledged that the current U.S. debt structure is unsustainable and that the United States must gradually reduce its budget deficit and debt levels. At the same time, she warned that the Middle East conflict could deliver further shocks to the global economy—and commended Qatar’s strong fiscal buffers as enabling it to withstand such shocks. Debt warning threshold reached earlier—U.S. government borrowing is the main driver The core basis for the IMF’s upgraded debt-risk warning lies in the rapid expansion of government borrowing, particularly in the United States. According to the latest forecast, the global public-debt-to-GDP ratio will breach the critical 100% threshold in 2029—two years earlier than previously expected. Speaking at the forum, Georgieva stated plainly: 'We have long warned about the necessity of fiscal consolidation; everyone knows it must be done—but actual action falls far short.' This unusually direct language explicitly highlights collective governmental failure in fiscal discipline. Among all major economies, the United States draws the IMF’s most explicit attention.

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Middle East War, High Debt Levels to Dominate IMF-World Bank Meetings in Bangkok

Middle East War, High Debt Levels to Dominate IMF-World Bank Meetings in Bangkok

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