The three major international organizations announce: formation of a coordination team!

On April 1 local time, the International Monetary Fund (IMF) announced that the heads of the International Energy Agency, the International Monetary Fund, and the World Bank Group have agreed to establish a coordination group to maximize the role of each institution in addressing the energy and economic impacts of the situation in the Middle East.

The three international organizations also issued a joint statement, saying that the group will assess, through the coordination of multiple data sets, the severity of the impacts on countries and regions in the wake of the conflict between the United States, Israel, and Iran, and will coordinate response mechanisms, including concessional financing.

The joint statement noted that the conflict between the United States, Israel, and Iran has caused major disruption to the lives and livelihoods of people in the Middle East and has triggered one of the largest supply shortages in the history of global energy markets. The shock is far-reaching, affecting the world at large, and is characterized by a high degree of unevenness; it is especially severe for energy-importing countries, particularly low-income countries. Rising prices for oil, natural gas, and fertilizer have been transmitted globally, and have also raised concerns about food prices. Global supply chains, including those for helium, phosphate rock, aluminum, and other commodities, have been affected; disruptions to major hub flights in the Gulf region have also impacted the tourism industry. Market volatility arising from this, currency depreciation in emerging economies, and concerns about inflation expectations are exacerbating the risks of tighter monetary policy and slower economic growth.

The three international organizations said that, at a time of high uncertainty, the institutions must work together, jointly monitor developments, coordinate analytical work, and provide coordinated support to help policymakers respond to this crisis. The coordination group has therefore been jointly decided to be established.

According to the joint statement, on the one hand, the coordination group will assess the severity of the impacts on countries and regions through sharing data on energy market prices, trade flows, pressures on fiscal positions and the balance of international payments, inflation trends, restrictions on exports of key commodities, and supply-chain disruptions. On the other hand, it will coordinate the establishment of response mechanisms; specific measures may include: targeted policy recommendations, assessing potential financing needs and providing corresponding funding support (including concessional financing), and, as appropriate, applying risk-mitigation tools. In addition, relevant stakeholders—including other multilateral, regional, and bilateral cooperation partners—may be mobilized to provide coordinated, consistent, and efficient support to countries that need it.

The three international organizations said that the coordination group will also cooperate with other international organizations as needed and draw on their professional expertise.

Proofread by: Liao Shengchao