IMF Ready to Help Economies Squeezed by Mideast Oil Shock

Article content(Bloomberg) — The International Monetary Fund said it stands ready to assist countries facing balance of payment concerns amid heightened uncertainty from the Middle East conflict.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentIMF Managing Director Kristalina Georgieva said that she expects greater demand for the fund’s programs, especially since foreign aid is also on the decline. About 50 countries already rely on the fund to meet their balance of payment needs, she said in an interview with Bloomberg Television’s Haslinda Amin in Bangkok.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle content“We have some of our members that have significant balance of payment concerns already engaging with us,” Georgieva said on Friday. “We are ready to act. We recognize our responsibility in this world of uncertainty to be an anchor of stability.”Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentShe expressed concern for some Pacific Island countries that are among the most vulnerable to a disruption in global oil supplies. Low-income countries and those with high levels of debt could also come under pressure, she said.Article contentAccording to Georgieva, a 10% increase in energy prices lasting a year would raise inflation by 40 basis points and slow growth by up to 0.2 percent.Article contentCentral banks must brace for the impact of a possible oil shock, both on consumer prices that could spur inflation, but also on weaker currencies that could make the servicing of foreign debt more costly, she said.Article contentShe also urged countries to build fiscal capacity, strengthen institutions, and diversify energy supplies.Article contentOn Thursday, Georgieva warned of a “world of more frequent, more unexpected shocks,” with the war in the Middle East being the latest example. She called for policymakers to prepare their economies for potential challenges, which go beyond politics to include disruptive technology and trade conflicts.Article contentThe attack by the US and Israel has killed hundreds in Iran, which in turn has unleashed barrages of missiles and drones against its assailants, including US forces in the region. Shipping through the Strait of Hormuz has dwindled and oil prices have spiked, threatening to ignite inflation and choke off growth. Article contentThis story was produced with the assistance of Bloomberg Automation.Article content—With assistance from Cecilia Yap and Linus Chua.Article content(Adds comments, inflation outlook.)Article contentTrending Posthaste: Canada loses to the U.S. again, but this time it's not in the hockey rink News These eight charts show 'rupture' with Canada under Trump's tariffs Economy Posthaste: This dormant pipeline needs to be restarted for the sake of Canada, economists say News Bank of Canada governor warns of growing risks to financial stability Economy CNRL says it will delay $8-billion mine expansion until carbon pricing rules are clear Oil & Gas Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Posthaste: Canada loses to the U.S. again, but this time it's not in the hockey rink News These eight charts show 'rupture' with Canada under Trump's tariffs Economy Posthaste: This dormant pipeline needs to be restarted for the sake of Canada, economists say News Bank of Canada governor warns of growing risks to financial stability Economy CNRL says it will delay $8-billion mine expansion until carbon pricing rules are clear Oil & Gas