AFP, Washington

The International Monetary Fund expects to have to provide up to $50 billion in immediate financial assistance to countries affected by the Middle East war, its managing director said on Thursday, with the crisis likely to have lasting economic effects.

“Given the spillovers of the Middle East war, we expect near-term demand for IMF balance-of-payments support to rise to somewhere between $20 billion and $50 billion, with the lower bound prevailing if the ceasefire holds,” Kristalina Georgieva said, according to prepared remarks shared with AFP.

She added that food insecurity due to transport and supply chain disruptions caused by the war was expected to affect at least 45 million people.

“Even in a best case, there will be no neat and clean return to the status quo ante,” she said, as a fragile ceasefire appeared to hold on Thursday.

The IMF chief was kicking off the annual Spring Meetings co-hosted by the International Monetary Fund and the World Bank in Washington, which bring together top economic policymakers from around the world.

The US-Israel war on Iran, launched on February 28, has engulfed the Middle East in violence, snarled supply chains and sent oil prices surging after Tehran virtually blocked the Strait of Hormuz.

Tehran and Washington have traded accusations of violations of the ceasefire terms, with talks aimed at a more durable peace slated for Saturday.

The IMF will pare its global growth forecast for 2026 based on the impact of the crisis, with spiraling energy costs hitting some vulnerable economies harder than others.

Georgieva said that even in the Fund’s “most hopeful scenario,” infrastructure damage, supply disruptions and a loss of market confidence among other “scarring effects” meant growth would be less than expected.

She highlighted the “asymmetric” effects of the crisis, hitting low-income energy importers with limited fiscal space much harder than others.

“Spare a thought for the Pacific Island nations at the end of a long supply chain, wondering if fuel will still reach them in the wake of such a severe disruption,” she said.

MIDDLE EAST ECONOMIES HIT

On Wednesday, the World Bank said the Middle East -- which has seen retaliatory Iranian strikes hit countries across the Gulf and Israeli attacks in Lebanon -- saw “a serious and immediate economic toll” from the war.