The International Monetary Fund is preparing for a rise in formal loan requests as the war in the Middle East pushes up energy prices and fractures supply chains, the institution's managing director said on Wednesday during the IMF and World Bank spring meetings in Washington.
IMF Managing Director Kristalina Georgieva told reporters the fund expects at least a dozen countries - including several in sub-Saharan Africa - will seek new IMF financing programs to help manage higher import bills and disruptions to critical inputs. She repeated the fund's estimate that the conflict could generate additional demand for $20 billion to $50 billion in financial support, a need that could be met through new loans or by augmenting some of the IMF's 39 existing country financing programs.
Georgieva declined to identify specific countries seeking assistance. She also said the IMF was not currently discussing an augmentation of Egypt's $8 billion program, despite the war's effects on that country's economy.
Supply chains under pressure
Georgieva expressed concern about the physical breakdown of supply chains for a range of commodities and intermediate goods. She highlighted that Asian economies that rely on Gulf exports of oil, natural gas, naphtha, helium, fertilizer and other inputs face acute trade and production risks.
"These disruptions are not going to evaporate overnight, even if the war ends tomorrow. Why? Because a tanker is a slow moving vessel, it would take 40 days to get all the way to Fiji. So we need to be prepared that the impact of the supply disruptions in the weeks ahead is going to be deeper."
The managing director warned that even a rapid end to hostilities would not immediately restore flows, because maritime logistics and shipping schedules mean delays can persist for weeks.
Growth forecasts and downside scenarios
The IMF has already adjusted its global outlook, trimming expectations slightly in an updated World Economic Outlook. The IMF's baseline projection of 3.1% world growth in 2026 was contingent on a swift end to the conflict and falling oil prices. But the fund's chief economist, Pierre-Olivier Gourinchas, said the global economy was now "drifting" away from that baseline and toward a more adverse projection.
Under the more adverse scenario cited by IMF staff, global growth for 2026 would slow to 2.5% and oil prices would average roughly $100 a barrel for the year. In a deeper, longer-lasting "severe scenario," the IMF said global growth could decline to about 2%, a level the fund described as close to a global recession.
Fiscal and policy guidance
Faced with looming shortages and higher prices, Georgieva urged countries to implement measures that reduce fuel consumption and lower the oil intensity of their economies. She offered policy examples such as temporarily making public transport free to encourage a shift away from private vehicle use.
At the same time, the IMF reiterated strong caution against untargeted fiscal measures. Georgieva and IMF staff warned that broad energy subsidies would merely prolong high prices and could intensify inflationary pressures. The IMF's Fiscal Monitor, released on Tuesday, recommended against subsidies and instead advocated for targeted, temporary cash transfers to support the most vulnerable without masking higher fuel prices or boosting demand.
IMF Fiscal Affairs Director Rodrigo Valdes emphasized the distributional consequences of untargeted support at a separate press event, saying broad fuel subsidies would divert supplies away from poorer countries and exacerbate inflation. He told reporters, "If you try to undo a supply shock by trying to prop up demand, you will end up with more inflation."
Monetary policy stance
To avoid the wartime energy shock turning into a 1970s-style wage-price spiral, the IMF advised central banks to remain alert to signs of such dynamics but not to rush into tightening. Georgieva said the fund's guidance distinguishes between central banks with strong credibility and those with weaker inflation-fighting track records.
"What we tell central banks is, if you have high credibility, signal that your objective is to protect price stability, but don’t rush,"
Georgieva added that central banks with less credibility in controlling inflation may need to take stronger measures, but she did not single out any countries.
What the IMF sees ahead
The IMF is positioning to respond to fresh requests for balance of payments support and program augmentations as governments confront the combined shock of higher energy costs and disrupted supply lines. The fund's guidance emphasizes energy conservation, targeted fiscal aid for vulnerable populations, and cautious monetary policy responses tailored to each country's inflation credibility.
As the situation evolves, the IMF's combination of forecasting scenarios and conditional policy advice signals the institution expects further strain on emerging economies and commodity-importing countries, with particular stress on sectors tied to energy, shipping, and fertilizer-dependent agriculture during the weeks ahead.