WASHINGTON, D.C. — The International Monetary Fund (IMF) and World Bank hold their spring meetings this week because the war within the Middle East weighs on the worldwide economy.
In a speech ahead of the 2026 Spring Meetings, IMF Managing Director Kristalina Georgieva said addressing economic shocks amid the energy crisis triggered by the Middle East war shall be at the middle of the Spring Meetings.
“A resilient world economy is being tested again by now-paused war within the Middle East. The conflict has caused considerable hardship within the region and across the globe,” she said on the curtain raiser on April 10.
“Our focus shall be on how best to weather this latest shock and ease the pain on economies and on people. This requires understanding the character of the shock, the channels through which it affects the economy, the dimensions of the impact, and the policies that may mitigate it,” she added.
Even within the “most hopeful scenario,” Ms. Georgieva said there shall be a growth downgrade for the worldwide economy because the war caused everlasting damage to energy sectors worldwide.
“Even in a best case, there shall be no neat and clean return to the established order ante,” she said.
The IMF’s World Economic Outlook is scheduled to be published on April 14.
The US-Israeli war on Iran, which began on Feb. 28, sent oil prices soaring, disrupted supply chains, and affected tourism and air travel. The Philippines, a net oil importer, is facing sharp price pressures amid oil shocks.
Ms. Georgieva said central banks ought to be able to hike rates with a purpose to avoid an inflationary spiral if oil price shocks proceed but noted that premature tightening may hurt growth.
“Be watchful, consider conditions, because for those who tighten prematurely and unnecessarily, you’re throwing cold water on growth. After which the demand may shrink. After which, from a supply shock you get right into a supply-and-demand shock. And it could get ugly,” she said.
At the identical time, World Bank President Ajay Banga told Reuters that the war within the Middle East can have a cascading impact on the worldwide economy, even when the ceasefire takes hold.
He said the damage on the worldwide economy shall be far deeper if the ceasefire fails, and the Middle East conflict escalates.
Mr. Banga on Tuesday said global growth could possibly be lowered by 0.3 to 0.4 percentage point (ppt) in a baseline scenario, with an early end to the war, and by as much as 1 ppt if it endures. Inflation could increase by 200 to 300 basis points, with a much higher impact — of as much as 0.9 ppt — if the war continues, he said.
The World Bank’s baseline estimate now projects growth in emerging markets and developing economies of three.65% in 2026, compared with 4% in October, dropping as little as 2.6% in an adversarial scenario with a longer-lasting war. Inflation in those countries is now forecast to hit 4.9% in 2026, up from the previous estimate of three%. The intense scenario could see inflation rising as high as 6.7%, in accordance with estimates viewed by Reuters.
Mr. Banga said the bank was cautioning countries to avoid establishing energy subsidies that they might not afford, which might trigger even greater problems in the longer term.
“I worry about ensuring that they’ll come through this crisis, targeting what they should do, but not doing anything that further deteriorates that fiscal space,” he said within the Reuters interview.
The World Bank slashed the Philippine gross domestic product (GDP) growth forecast to three.7% this 12 months, from the previous projection of 5.3%, reflecting the impact of the Middle East conflict.
If realized, it is going to be slower than the post-pandemic low of 4.4% GDP growth in 2025 and below the Philippine government’s 5-6% goal for 2026.
Nonetheless, the World Bank raised its GDP growth projection for the Philippines to five.6% in 2027 from 5.4% previously. It’s inside the federal government’s 5.5-6.5% goal for 2027.
Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the meetings bear heavy weight for the Philippines because it confronts a national energy emergency amid its chairmanship of the Association of Southeast Asian Nations (ASEAN).
“This 12 months’s IMF-World Bank Spring Meetings are highly relevant for the Philippines because they arrive at a moment of overlapping risks and responsibilities,” he told BusinessWorld in a Viber message.
“You’ve a Middle East war pushing oil prices, inflation, and external risks higher, while the Philippines steps right into a leadership role as ASEAN chair,” he added.
Last month, President Ferdinand R. Marcos, Jr. placed the Philippines under a state of national energy emergency for a 12 months amid concerns over the country’s energy supply.
Mr. Ravelas said the Spring Meetings provide a platform for “insurance and influence” amid still heightened uncertainty.
“These meetings matter because they’re about insurance and influence — shoring up financial buffers, keeping policy credibility intact, and helping shape the regional response relatively than simply reacting to global shocks,” he said.
Mr. Ravelas noted that ASEAN finance ministers and central bank governors will likely prioritize tackling energy-driven inflation and growth risks in addition to boosting financial resilience.
“Climate and disaster risk will even loom large, especially for the Philippines, and the message ought to be clear: climate risk is macro risk, and funding needs to maneuver faster and crowd within the private sector,” he said.
Because the regional lead, the Philippines should ensure emerging economic issues are approached in a “targeted and disciplined” way during this week’s dialogues.
“The correct approach is disciplined and targeted — protect vulnerable sectors without blowing up the fiscal position, secure contingent credit and climate-linked financing before crises hit, and keep ASEAN open and investment-friendly despite a more divided global economy,” he said.
“Briefly, these meetings will not be about rhetoric — they’re about credibility, coordination, and capital. If handled well, the Philippines can each protect its economy and assert itself as a serious economic voice inside ASEAN,” Mr. Ravelas added.
The Philippines assumed chairship of the 11-member regional bloc this 12 months, composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and Timor-Leste. — Katherine K. Chan with reports from Reuters