Global Economy Shows Resilience Amid Middle East Conflict, Institutions Urge Caution

'Global economy resilient despite Mideast war'

Washington, July 9

The International Energy Agency (IEA), International Monetary Fund (IMF), World Bank Group (WBG) and World Trade Organization (WTO) issued a joint statement after a meeting of their high-level coordination group on Wednesday (local time), established in April to respond to the energy, trade and economic consequences of the conflict.

The four organisations said that they reviewed global developments, assessed conditions in vulnerable countries and discussed ways to better coordinate assistance.

"We met to take stock of energy, trade, and economic developments, to discuss the situation in vulnerable countries, and to further coordinate our support to those in need," the statement said.

The institutions said the global economy had shown resilience despite the conflict, although the effects have varied widely across countries and sectors.

"The global economy has been broadly resilient to the shock from the war in the Middle East, even as some economies have experienced a slowdown in growth and an uptick in inflation," the statement said.

It added that "the impact has been highly uneven, affecting energy supplies, food security, various commodities, and economic activity across many countries and regions and creating deeper concerns about growth and price stability."

The organisations welcomed easing pressures in some commodity markets but cautioned that risks remain.

"We encourage further progress toward a resolution to the conflict and the reopening of the Strait of Hormuz," they said.

The statement noted that fuel and fertiliser prices had declined since the group's previous meeting in June.

"However, uncertainty remains high, and the impacts of the war could linger. Energy markets and transit of goods are still facing strains," it said.

The four organisations called on governments and the international community to remain vigilant and continue working together to preserve global trade and energy flows.

They urged countries to "uphold the principle of freedom of navigation in the Strait and globally, support economic recovery, protect jobs and livelihoods, strengthen energy and food security, including through improving port infrastructure and trade facilitation, and increase broader resilience to future shocks."

The institutions also pledged continued coordination as the situation evolves.

"We will continue to work with each other and with our members to closely monitor energy, trade, and economic developments. We will strengthen our readiness to act further if needed and will continue adapting our support to countries as the situation evolves. That includes helping them build greater energy, food, trade, and economic resilience," the statement said.

The coordination group was formed in April as the conflict in the Middle East disrupted energy markets, shipping routes and global trade. The four institutions have since held regular consultations to align policy responses and support countries facing economic stress.

— IANS