Washington: The World Bank Group said on Thursday it is prepared to deploy up to $100 billion over the next 15 months to help developing countries cope with the economic fallout from the conflict in the Middle East, as rising energy prices and slowing growth place fresh pressure on vulnerable economies.
The multilateral lender said it is immediately making available between $50 billion and $60 billion through existing instruments, including $25 billion in pre-arranged financing, to support countries facing economic stress from the conflict.
“If the conflict and its economic fallout persist, the World Bank Group can scale up its support to $80–100 billion over 15 months,” the institution said in its latest ‘Global Economic Prospects’ report.
The funding is intended to support social safety nets, strengthen government finances and provide working capital and liquidity assistance for businesses and farms affected by the crisis. More than 30 countries are already working with the World Bank to prepare rapid-response measures under the programme.
World Bank President Ajay Banga said the institution’s immediate priority was helping countries absorb the shock while maintaining long-term development goals.
“Developing countries have faced a series of challenges over the last decade,” Banga said. “The impact differs by country, but the basic test is the same: protect people and preserve stability today, without giving up on growth and jobs tomorrow.”
He said the World Bank was “providing liquidity where it is needed now” and stood ready with “additional financing, guarantees, and private-sector solutions if pressures deepen.”
The announcement came as the World Bank cut its forecast for global economic growth in 2026 to 2.5 per cent, the weakest pace since the Covid-19 pandemic, citing higher energy prices, rising inflation and tighter financial conditions linked to the conflict.
Chief Economist Indermit Gill said the world economy had been hit by a succession of shocks in recent years.
“Now, this time around, it is the biggest supply shock in more than 50 years,” Gill said, referring to the surge in oil, gas and fertiliser prices following the outbreak of conflict in the Gulf.
The World Bank said developing economies are expected to grow only 3.6 per cent this year, down from 4.4 per cent in 2025, marking a post-pandemic low. Economies directly affected by the conflict are projected to experience the sharpest slowdown, while many energy-importing nations face rising import bills and inflation.
Gill said international institutions had a responsibility to help countries weather the crisis.
“This is what organisations like the World Bank are meant to do, and this is what we are trying to do,” he said.
The World Bank’s support package forms part of a broader crisis-response strategy that includes emergency lending, reprioritisation of existing projects and the potential expansion of financing if conditions worsen. The institution said the objective is to help countries maintain essential services, support vulnerable populations and avoid deeper economic disruptions while longer-term recovery efforts take shape.
The announcement comes as developing countries grapple with elevated debt burdens, tighter global financial conditions and slower growth. Many governments entered the latest crisis with limited fiscal space after years of coping with the pandemic, inflation shocks and geopolitical disruptions, leaving them more vulnerable to a new surge in energy and food prices.
(IANS)
