War and Debt Dominate IMF-World Bank Meetings in Bangkok
Theo Al Jazeera English
Global finance officials meet in Bangkok as the widening Middle East conflict, the largest energy supply shock on record and rising interest rates threaten sluggish world growth. The IMF-World Bank annual meetings are being held outside Washington for the first time in three years.
Financial officials from around the world will meet in Bangkok this week under the shadow of an expanding war in the Middle East, the largest energy supply shock on record and rising interest rates — forces that together pose major risks to already slow global economic growth.
The U.S.-Israeli war against Iran, now in its eighth month, and its inflationary fallout are expected to dominate the agenda and sideline discussions at the annual meetings of the International Monetary Fund and the World Bank — the first time in three years the gatherings have been held outside Washington.
IMF Managing Director Kristalina Georgieva told Reuters that 18,000 people have registered to attend, more than 4,000 above the most recent meeting held away from headquarters, in Morocco in October 2023.
Notably absent will be U.S. Treasury Secretary Scott Bessent. A U.S. official said he has dispatched two senior officials in his place while he deals with "internal matters." Federal Reserve Chairman Kevin Warsh will attend and is expected to take part in a public event with Georgieva on Oct. 16.
According to Georgieva, several other finance ministers are also staying home for domestic budget and election duties, but most central bank governors will attend.
Bessent's decision to skip both this high-level meeting and the G20 summit — a group the U.S. chairs this year — could disappoint partners amid rising tensions over the Iran conflict, Ukraine's war against Russian aggression, and Washington's imposition of sanctions on the International Criminal Court.
Releasing fossil fuel reserves
The Group of Seven industrialized nations has agreed to release 100 million barrels of diesel and crude oil from emergency reserves, under pressure from U.S. President Donald Trump, who wants pump prices to fall before a November election that could cost his Republican Party control of Congress.
On Friday, Trump announced a deal with Russia to supply additional diesel to the global market, along with a temporary waiver of U.S. sanctions aimed at cutting off Moscow's revenue for the war in Ukraine. The move immediately drew criticism from Ukrainian President Volodymyr Zelenskyy.
More than a billion barrels of oil have been released, mainly from onshore commercial stockpiles, since the war began on Feb. 28. But industry executives say the oil available to global markets is dwindling, leaving the market more fragile and adding upward pressure on prices.
The IMF has signaled little change to its 3% forecast for global growth in 2026, and may nudge next year's projection slightly higher. However, several countries will see downgrades, including Ukraine — now in its fifth year fighting Russian aggression — and Gulf states hit by Iranian attacks and steep declines in energy exports.
IMF research published Tuesday showed that food and energy price spikes are increasingly a common source of crises, pushing inflation expectations higher for longer, deepening poverty and threatening economic stability.
One headache for policymakers is the growing burden of public debt, which is eroding growth and adding to inflationary pressure. The IMF says public debt is at its highest level since World War II and will exceed 100% of gross domestic product before 2030.
Advanced economies, led by the United States, carry the highest debt-to-GDP ratios, but emerging markets and low-income countries are especially vulnerable to a convergence of challenges: capital outflows chasing higher U.S. interest rates, extreme weather driven by El Nino, and a lack of investment in artificial intelligence — a factor that has helped soften negative supply shocks in the U.S. and other wealthy nations.
Developing countries are particularly exposed when public debt is high and will have to refinance at higher interest rates. In 2026 alone, they face $400 billion in debt payments to foreign creditors, while interest payments already exceed 10% of budget revenue on average.
Many low-income countries are worried about new IMF recommendations for lending programs, which require fewer but deeper reforms as a condition for loan approval — a change many fear will lead to painful austerity measures.
