Global Economic Strain: Countries Seek IMF Aid Amid Energy Crisis

Amid rising energy prices and supply chain disruptions due to Middle East conflict, the IMF expects over a dozen nations to seek new loan programs. The disruptions may demand $20-50 billion in financial support. IMF advises against broad energy subsidies, promoting targeted aid and energy conservation instead.

The International Monetary Fund anticipates that over a dozen countries will apply for new loan programs to handle the escalating energy prices and supply chain disturbances resulting from the ongoing Middle East war. Among the affected are several sub-Saharan African nations, IMF's head announced on Wednesday.

IMF Managing Director Kristalina Georgieva highlighted the worsening supply issues due to the closure of the Strait of Hormuz, urging nations to reduce fuel consumption. Georgieva estimated these disruptions could necessitate $20 billion to $50 billion in financial support, involving new loans and enhancing current programs.

Addressing the press, Georgieva expressed concerns over the impact on global economies, particularly highlighting risks of food insecurity in developing countries. IMF counseled against broad energy subsidies, advocating instead for targeted, temporary aid to the vulnerable, ensuring economic adjustments focus on fundamentals and policy agility.

(With inputs from agencies.)