West Asia war: World Bank, IMF, IEA announce coordination group amid energy crises

E-PaperSubscribeSubscribeEnjoy unlimited accessSubscribe Now! Get features like The World Bank, the International Monetary Fund (IMF), and the International Energy Agency (IEA) have announced a coordination group to “maximise” response to energy crises and economic shocks from the West Asian war, especially in emerging countries. The group will “maximise” response to energy crises and economic shocks from the West Asian war. (imf.org)Impacts of the war are “substantial”, hitting net energy importers and low-income countries more, the bank said in a statement on Thursday. The multi-agency group will provide recommendations to countries on measures to cushion the shocks, according to the statement. The group will coordinate a response mechanism that “may include targeted policy advice, assessment of potential financing needs and related provision of financial support (including through concessional financing), and use of risk mitigation tools as appropriate”, the statement added. “It is [the impacts] already transmitted through higher oil, gas, and fertilizer prices, and is triggering concerns about food prices as well.” Volatile markets, weakening of currencies in emerging economies, and concerns about inflation expectations “raise the prospect of tighter monetary stances and weaker growth”. India, a net importer of oil and gas, is one of the Asian countries most exposed to the war’s effects, analysts have said. “The near-term outlook remains uncertain as higher input costs and supply constraints pose downside risks to economic expansion,” the Union finance ministry said in its monthly economic review for March. India imports nearly 90% of its crude, half of its liquefied natural gas, and two-thirds of its LPG, most of which comes from West Asia through the Strait of Hormuz, where Iran’s crackdown on traffic has choked off global supplies since the conflict began on Feb 28. A see-sawing Brent, the crude benchmark, jumped 6.6% to nearly $108 a barrel on Thursday, as inflationary pressures have rippled across economies, especially India. Asia’s third-largest economy has raised prices of household cooking gas, commercial LPG, and ATF. Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.