World Bank Moves to Support Economies Hit by Middle East Conflict Amid Rising Global Costs

The World Bank Group has announced plans to support emerging economies grappling with the ripple effects of the ongoing Middle East conflict, as rising commodity prices and global supply chain disruptions begin to strain markets. Several client countries have already reported economic pressure, highlighting the far-reaching consequences of the crisis beyond the immediate region.

In a statement released on March 26, the institution noted that governments and businesses are increasingly concerned about disruptions to key shipping routes, which have significantly driven up costs. These disruptions are no longer limited to energy supplies but now extend to fertilizers and other critical agricultural inputs, raising fears of broader impacts on food production and inflation.

Recent market data underscores the severity of the situation. Crude oil prices surged by nearly 40 percent between February and March, while liquefied natural gas shipments to Asia rose sharply by almost two-thirds. At the same time, prices of nitrogen-based fertilizers jumped by close to 50 percent, placing additional pressure on farmers and heightening the risk of food insecurity in vulnerable regions.

To cushion the impact, the World Bank said it is mobilising large-scale support, combining immediate financial relief with strategic policy guidance. The institution plans to deploy a wide range of tools, including crisis response mechanisms and pre-arranged financing facilities, to deliver rapid assistance. Over time, this support will transition into fast-disbursing funding tied to sound economic reforms aimed at stabilising and rebuilding affected economies.

Through its private sector arms, the Bank will also provide liquidity support, trade finance, and working capital to help businesses navigate the ongoing disruptions. While acknowledging the uncertainty surrounding the conflict, the World Bank warned that prolonged instability and further infrastructure damage could deepen economic challenges. Nonetheless, it reaffirmed its commitment to helping countries protect recent gains and remain resilient in the face of global shocks.

SOURCE: Business day