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WASHINGTON, D.C. \u2014 The <\/span>International Monetary Fund <\/span>(IMF) and World Bank hold their spring meetings this week because the war within the Middle East weighs on the worldwide economy.<\/p>\n 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.<\/span><\/p>\n \u201cA 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,\u201d she said on the curtain raiser on April 10.<\/p>\n \u201cOur 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,\u201d she added.<\/p>\n Even within the \u201cmost hopeful scenario,\u201d Ms. Georgieva said there shall be a growth downgrade for the worldwide economy because the war caused everlasting damage to energy sectors worldwide.<\/p>\n \u201cEven in a best case, there shall be no neat and clean return to the established order ante,\u201d she said.<\/p>\n The IMF\u2019s World Economic Outlook is scheduled to be published on April 14.<\/p>\n 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.<\/span><\/p>\n 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.<\/p>\n \u201cBe watchful, consider conditions, because for those who tighten prematurely and unnecessarily, you\u2019re 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,\u201d she said.<\/p>\n 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.<\/p>\n He said the damage on the worldwide economy shall be far deeper if the ceasefire fails, and the Middle East conflict escalates.<\/p>\n 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 \u2014 of as much as 0.9 ppt \u2014 if the war continues, he said.<\/p>\n The World Bank\u2019s 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.<\/p>\n 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.<\/p>\n \u201cI 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,\u201d he said within the Reuters interview.<\/span><\/p>\n 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.<\/p>\n 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\u2019s 5-6% goal for 2026.<\/p>\n 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\u2019s 5.5-6.5% goal for 2027.<\/p>\n 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).<\/span><\/p>\n \u201cThis 12 months\u2019s IMF-World Bank Spring Meetings are highly relevant for the Philippines because they arrive at a moment of overlapping risks and responsibilities,\u201d he told BusinessWorld<\/i> in a Viber message.<\/p>\n \u201cYou’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,\u201d he added.<\/span><\/p>\n 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\u2019s energy supply.<\/p>\n Mr. Ravelas said the Spring Meetings provide a platform for \u201cinsurance and influence\u201d amid still heightened uncertainty.<\/p>\n \u201cThese meetings matter because they’re about insurance and influence \u2014 shoring up financial buffers, keeping policy credibility intact, and helping shape the regional response relatively than simply reacting to global shocks,\u201d he said.<\/span><\/p>\n 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.<\/p>\n \u201cClimate 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,\u201d he said.<\/p>\n Because the regional lead, the Philippines should ensure emerging economic issues are approached in a \u201ctargeted and disciplined\u201d way during this week\u2019s dialogues.<\/p>\n \u201cThe correct approach is disciplined and targeted \u2014 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,\u201d he said.<\/span><\/p>\n \u201cBriefly, these meetings will not be about rhetoric \u2014 they\u2019re 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,\u201d Mr. Ravelas added.<\/p>\n 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. \u2014 Katherine K. Chan <\/b>with reports from <\/i>Reuters<\/b><\/span><\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The International Monetary Fund (IMF) logo is seen outside the headquarters constructing in Washington, US, Sept. 4, 2018. \u2014 REUTERS\/YURI GRIPAS\/FILE PHOTO WASHINGTON, D.C. \u2014 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. 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