Developing country policymakers left this week’s IMF-World Bank meetings more frustrated than ever that successive external shocks are derailing their efforts to tackle high debt, reform their economies and deliver better lives for millions of citizens now struggling to pay for food and fuel.
But unlike the past, some officials and economists say this crisis could be the tipping point that drives countries to take more independent and regionally co-ordinated action. The war, and the meteoric spikes it caused in oil and fertiliser prices, will weigh on global growth and drive up inflation, even if it ends soon, the IMF and World Bank said.
It threatens to blow out the fiscal balances of countries that had just gotten back on track after debt default, such as Zambia and Sri Lanka. And it is also eating into the buffers others built after the pandemic, the Russia-Ukraine war and then US trade tariffs upended their economies. Kenya last week became the first larger emerging economy to publicly confirm it formally requested emergency funds from the World Bank.
“It’s like you got hit in the head many times. Once you got up and then you got hit again,” assistant governor of Thailand’s central bank Chayawadee Chai-anant said. The IMF has lowered its 2026 growth forecast for emerging nations to 3.9 per cent from 4.2pc in January 2026, but those projections could worsen if the war persists.
Reza Baqir, head of sovereign advisory services at Alvarez & Marsal, said countries making painful reforms, from debt restructuring to subsidy removal, are now left scrambling with fiscal balances destroyed by yet another crisis not of their making.
“It’s a depressing mood, and it is also a repeated demonstration of the consequences on bystanders, where due to developments not of their own making, they have to deal with a severe economic crunch,” Baqir said.
Nigeria is one such example. In the past three years, it has removed costly fuel subsidies, eased foreign exchange rules and streamlined regulations to draw a slew of foreign investor cash.
“We find that we are doing all we can, and it is shock after shock, externally and exogenously created,” Nigerian finance minister Wale Edun said.
“That sort of takes away from achievements and from our progress.”
Josh Lipsky, director of economic affairs at the Atlantic Council, said conversations with dozens of other financial leaders showed their patience was wearing thin.
The IMF and World Bank, though, offered few solutions during the week; top leaders instead cautioned countries against using energy subsidies to shield citizens, while acknowledging that the latest hike in energy and food prices could well foment social unrest and outward migration.
IMF Managing Director Kristalina Georgieva said that 12 or more countries are seeking loans to help weather the shock, estimating demand of $20 billion to $50bn, depending on the duration of the war.
The World Bank said countries could tap up to $25bn in crisis response funds quickly, with up to $60bn available over six months.
Two days into the meetings, World Bank president Ajay Banga, clearly hearing urgent pleas for help, said the Bank could make up to $100bn available by year’s end, if needed, by restructuring its balance sheet.
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