WASHINGTON: The International Monetary Fund (IMF) is running scenarios on countries to gauge which economies could be in need of fresh financing if the Iran war drags on, according to people familiar with the matter.
The IMF’s Strategy, Policy and Review department – a key unit that’s in charge of the design, implementation and evaluation of fund policies – has asked so-called country desks at the IMF to share their analysis on areas from current account status to potential funding needs, the people said.
The assessment is focused on nations with active financing programmes, one of the people said, asking not to be named because the information isn’t public.
Asked about the analysis request, an IMF spokesperson highlighted that managing director Kristalina Georgieva recently said that, in an uncertain world, more countries often turn to the fund for support and that the lender stands ready to provide help as needed.
Surging costs of commodities including oil and natural gas are putting major strains on economies around the world, raising the risk of diminished revenues for governments along with higher spending needs to support their citizens.
Disruptions in supplies of fertilisers have hurt prospects for agricultural production.
Brent crude was trading at over US$102 a barrel on Wednesday, having shot up from roughly US$70 before the war.
The IMF currently has programmes with 50 countries and stands ready to augment existing arrangements or create new ones if needed, Georgieva said in an interview with Bloomberg Television on March 6. The fund said Wednesday that it to date hadn’t received any requests.
She expressed particular concern for oil-importing nations, Pacific Island economies that sit “at the end of the supply chain” and low-income countries with high debt levels.
IMF credit outstanding, a measure of money disbursed by the Washington-based fund, was about US$166bil as of March 24, with a lending capacity of about US$1 trillion, according to IMF data. — Bloomberg
