West Asia war's economic impact could linger despite resilient global economy, IMF and others warn

The lingering economic impact of the war in West Asia could continue to weigh on global growth and price stability despite the global economy’s resilience, the heads of the International Energy Agency (IEA), International Monetary Fund (IMF), World Bank Group and World Trade Organization (WTO) said on Monday.

In a joint statement following a July 7 meeting of their high-level coordination group, the four institutions said uncertainty remains high and the effects of the conflict could persist, with energy markets and global trade routes continuing to face strains.

While fuel and fertilizer prices have declined since the group’s last meeting in June, the organizations said the war has had an uneven impact across countries, disrupting energy supplies, food security, commodity markets and economic activity.
Some economies have also experienced slower growth and higher inflation.

The institutions urged further progress toward resolving the conflict and reopening the Strait of Hormuz, while calling on governments and the international community to uphold freedom of navigation through the strategic waterway.

They also pledged to remain ready to take additional action and continue adapting support to help countries strengthen their energy, food, trade and economic resilience as the situation evolves.