• Source:JND
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The International Monetary Fund (IMF), the World Bank and the International Energy Agency (IEA) have said that the situation in West Asia remains uncertain due to the US-Israel and Iran war and this could keep fuel and fertilizer prices high for a long time.

Effects Of The US-Iran War

The heads of the International Energy Agency, the International Monetary Fund and the World Bank Group met in Delhi as part of a coordination group formed earlier this month to address the energy and economic impacts of the war in West Asia.

In a joint statement, the three institutions said that the war has led to forced displacement of people, affected employment and a decline in travel and tourism, which may take time to return to normal.

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"As we noted earlier this month, the impact of the war is widespread, global, and highly uneven. The impact has been particularly severe on energy-importing countries and low-income countries,” said IMF, World Bank, and IEA.

The shock has led to a surge in oil, gas, and fertilizer prices, raising concerns about food security and employment. "Some oil and gas producing countries in West Asia have also suffered significant losses in export revenue," the statement said. It added that the situation in West Asia remains highly uncertain, and shipping through the Strait of Hormuz has not yet fully returned to normal.

“Even if normal traffic through the Strait of Hormuz is restored, global supplies of key commodities will take time to return to pre-war levels, and fuel and fertilizer prices could remain high for a long time due to damage to infrastructure,” said IMF, World Bank, and IEA

It further stated that supply disruptions could lead to shortages of essential raw materials, impacting energy, food and other industries. The war has also led to displacement of people, impacting employment, and a decline in travel and tourism, which will take time to return to normal.

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What Was The Meeting About?

The heads of the three institutions shared their latest assessments of the war's impact on energy markets, the global economy, and various countries. The meeting took place ahead of the release of the IEA's monthly "Oil Market Report" and the IMF's "World Economic Outlook".

"We also discussed the situation in the countries most affected by this shock, and considered the responses of our institutions. Our teams are also working together at the country level to leverage our expertise to provide policy advice and financial support where needed," the statement said.

The heads of the three institutions remarked that they would continue to monitor the impact of the war on energy markets, the global economy and individual countries, and would continue to coordinate efforts to support member countries to lay the foundation for a strong economic recovery that ensures stability, growth and employment.

(With PTI inputs)


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