IMF-World Bank meetings to kick off with the global economy under strain

WASHINGTON, D.C. — The International Monetary Fund (IMF) and World Bank hold their spring meetings this week as the war in the Middle East weighs on the global 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 will be at the center of the Spring Meetings.

“A resilient world economy is being tested again by now-paused war in the Middle East. The conflict has caused considerable hardship in the region and around the globe,” she said at the curtain raiser on April 10.

“Our focus will be on how best to weather this latest shock and ease the pain on economies and on people. This requires understanding the nature of the shock, the channels through which it affects the economy, the size of the impact, and the policies that can mitigate it,” she added.

Even in the “most hopeful scenario,” Ms. Georgieva said there will be a growth downgrade for the global economy as the war caused permanent damage to energy sectors worldwide.

“Even in a best case, there will be no neat and clean return to the status quo 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 should be ready to hike rates in order to avoid an inflationary spiral if oil price shocks continue but noted that premature tightening may hurt growth.

“Be watchful, concentrate on conditions, because if you tighten prematurely and unnecessarily, you’re throwing cold water on growth. And then the demand may shrink. And then, from a supply shock you get into a supply-and-demand shock. And it may get ugly,” she said.

At the same time, World Bank President Ajay Banga told Reuters that the war in the Middle East will have a cascading impact on the global economy, even if the ceasefire takes hold.

He said the damage on the global economy will be far deeper if the ceasefire fails, and the Middle East conflict escalates.

Mr. Banga on Tuesday said global growth could 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 up to 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 3.65% in 2026, compared with 4% in October, dropping as low as 2.6% in an adverse 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 3%. The extreme scenario could see inflation rising as high as 6.7%, according to estimates viewed by Reuters.

Mr. Banga said the bank was cautioning countries to avoid setting up energy subsidies that they could not afford, which would trigger even bigger problems in the future.

“I worry about making sure that they can come through this crisis, targeting what they need to do, but not doing anything that further deteriorates that fiscal space,” he said in the Reuters interview.

The World Bank slashed the Philippine gross domestic product (GDP) growth forecast to 3.7% this year, from the previous projection of 5.3%, reflecting the impact of the Middle East conflict.

If realized, it will be slower than the post-pandemic low of 4.4% GDP growth in 2025 and below the Philippine government’s 5-6% target for 2026.

However, the World Bank raised its GDP growth projection for the Philippines to 5.6% in 2027 from 5.4% previously. It is within the government’s 5.5-6.5% target for 2027.

Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the meetings bear heavy weight for the Philippines as it confronts a national energy emergency amid its chairmanship of the Association of Southeast Asian Nations (ASEAN).

“This year’s IMF-World Bank Spring Meetings are highly relevant for the Philippines because they come at a moment of overlapping risks and responsibilities,” he told BusinessWorld in a Viber message.

“You have a Middle East war pushing oil prices, inflation, and external risks higher, while the Philippines steps 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 year 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 are about insurance and influence — shoring up financial buffers, keeping policy credibility intact, and helping shape the regional response rather than just 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 as well as boosting financial resilience.

“Climate and disaster risk will also loom large, especially for the Philippines, and the message should be clear: climate risk is macro risk, and funding needs to move faster and crowd in the private sector,” he said.

As the regional lead, the Philippines should ensure emerging economic issues are approached in a “targeted and disciplined” way during this week’s dialogues.

“The right 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.

“In short, these meetings are not about rhetoric — they’re about credibility, coordination, and capital. If handled well, the Philippines can both protect its economy and assert itself as a serious economic voice within ASEAN,” Mr. Ravelas added.

The Philippines assumed chairship of the 11-member regional bloc this year, composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and Timor-Leste. — Katherine K. Chan with reports from Reuters