The World Bank Group has pledged support for vulnerable economies facing mounting pressures from the escalating conflict in the Middle East, as sharp increases in commodity prices and supply chain disruptions begin to ripple across global markets.
In a statement, the group said the impact of the crisis is extending beyond energy markets to fertilisers and other critical agricultural inputs, heightening concerns over inflation and food security, particularly in import-dependent economies. It added that it plans to scale up support by combining immediate financial assistance with policy guidance and private sector interventions to sustain growth and protect jobs.
It stated: “A number of the World Bank Group’s clients in emerging markets have reached out to us as the conflict in the Middle East has started to impact commodity prices and logistics. We are working with governments, the private sector, regional partners, and other stakeholders to help them through this new set of challenges.
“We are closely monitoring global market developments, and we are in direct contact with the most affected client countries to understand what they are facing on the ground. Shipping route disruptions are increasing costs, and supply risks are spreading from energy into fertilisers and other critical agricultural inputs.
“Crude oil prices increased by nearly 40 per cent between February and March, the price of liquefied natural gas shipments to Asia rose by almost two-thirds, and the prices of nitrogen-based fertilisers increased by nearly 50 percent in March.
“The World Bank Group is moving quickly to help client countries to navigate this crisis. We are ready to respond at scale combining immediate financial relief with policy expertise and private sector support for the recovery of jobs and growth.
“We will draw on the full range of instruments we have available to support governments, firms, and households. Our aim is to deliver immediate relief by leveraging our active portfolio, our crisis response toolkit, and pre-arranged financing facilities.
“We will transition progressively to fast-disbursing instruments anchored in sound policies to underpin recovery. Through our private sector arms, we will provide firms with essential liquidity, trade finance, and working capital,” the bank said.
While acknowledging the fluid nature of the situation, the World Bank warned that prolonged disruptions and damage to infrastructure could deepen the challenges facing already fragile economies.
“Clearly, this is an evolving situation and we cannot predict the full range of impacts. As everyone has said, the longer this lasts, and the more damage there is to critical infrastructure, the more challenging this will be for our clients. That said, we are determined to be helpful and do all we can to safeguard some of the hard-won economic progress that these countries are making.”
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