The World Bank is in discussions with 30 to 40 countries about potential crisis aid to help them manage energy shocks and price increases triggered by the war in the Middle East, its president, Ajay Banga, told Reuters in an interview.
Banga said the global economy had proven fairly resilient, in part due to big AI investments and adjustments in supply and demand for oil, which meant that few countries had sought the initial $25 billion in crisis funds that the World Bank had made available when the war began in late February.
However, a sharp spike in diesel and fertilizer prices and other factors, including the looming super El Niño weather effect, were adding to challenges facing developing countries, Banga said in an interview ahead of this week’s annual meetings of the International Monetary Fund and World Bank.
“There is pressure, and so I think maybe over the coming months, more countries will come for some slice of that first $50 to $60 billion,” Banga said, referring to the initial $25 billion plus another $35 billion that countries could tap by diverting resources from already approved World Bank projects.
“We’ll see, but we’re ready. We’re engaged. We’re having conversations with a number of them, you know, 30 to 40 countries are in dialogue with us,” he said.
Many developing countries have been hit hard by the spike in energy prices and high interest rates that have increased borrowing costs at a time when their fiscal coffers are still depleted by measures taken during the Covid-19 pandemic and the spike in inflation following Russia’s military operation in Ukraine.
World Bank estimates show that developing countries owe external creditors about $400 billion in 2026, with interest payments alone comprising one-third of the total.
Banga said more countries had shown interest in retooling existing projects than in tapping the immediate crisis window to address their liquidity needs. If the situation worsened, the Bank could make available as much as $100 billion in funds, he said, exceeding the $70 billion disbursed during the pandemic.
