IMF, World Bank Meetings Show Limits in Mitigating Shocks, Reliance on US for Solutions

 A street food vendor uses a mobile phone while waiting for customers on a street in Hanoi on April 17, 2026. (AFP)
A street food vendor uses a mobile phone while waiting for customers on a street in Hanoi on April 17, 2026. (AFP)
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IMF, World Bank Meetings Show Limits in Mitigating Shocks, Reliance on US for Solutions

 A street food vendor uses a mobile phone while waiting for customers on a street in Hanoi on April 17, 2026. (AFP)
A street food vendor uses a mobile phone while waiting for customers on a street in Hanoi on April 17, 2026. (AFP)

Global finance leaders, whipsawed by Middle East war news, came to grips this past week with their inability to mitigate the economic damage from increasingly frequent geopolitical shocks, and a realization that counting on US leadership to resolve crises is no longer the guarantee it had long been.

At International Monetary Fund and World Bank Spring Meetings in Washington, participants swung from gloom over a worsening global economic outlook due to deepening energy price and supply shocks to tentative optimism as it appeared Iran may reopen the Strait of Hormuz and allow flows of oil, gas, fertilizer and other commodities to resume.

By Saturday that optimism was already fading amid new attacks on shipping. The IMF and the World Bank pledged up to a combined $150 billion in new financing assistance for developing countries hit hardest by the massive energy price shock, and celebrated their re-engagement with Venezuela's acting government after a seven-year pause.

They warned countries not to hoard oil and not to go overboard with expensive and untargeted fuel price subsidies. But in the end, there was not much they could do but watch statements from Tehran and the White House.

"Actually, some of ‌the most important decisions ‌on the global economy are not happening here," Josh Lipsky, international economics chair at the Atlantic Council, said of the ‌IMF ⁠and World Bank campus.

"The ⁠single most important development in the global economy happened between the US and Iran," he said. "We hope it's good news, and we'll wait and see."

Despite buoyant stock markets and a sharp drop in oil futures prices on Friday, Saudi Arabia's Finance Minister Mohammed Al-Jadaan summed up the mood of many officials when he said he would not be comfortable predicting an improved outlook until tankers start moving freely through the strait again with reasonably priced insurance and physical energy prices dropping.

"If the clear waters are open," Al-Jadaan told a news conference, "I think that's what would trigger, for me, a change in the scenario."

As soon as the IMF released a mild cut in its global growth forecast for 2026 to 3.1% under the most optimistic of three scenarios it devised for the task, it said that was already outdated and that the global economy was drifting towards a more adverse growth scenario of just 2.5%. ⁠The fund's latest World Economic Outlook said a prolonged war could push the global economy into recession.

SHOCK AFTER SHOCK

Before the US ‌and Israel launched attacks on Iran at the end of February, the global economy had just been recovering from ‌last year's shock from President Donald Trump's wave of steep tariffs on global trading partners. Discussions of trade tensions were more muted at this year's meetings, as was Russia's war on ‌Ukraine, though G7 finance ministers pledged to keep up pressure on Russia.

But a constant drumbeat of shocks that started with the COVID-19 pandemic in 2020 and Russia's ‌invasion of Ukraine in 2022 was teaching countries the US is no longer "the general" of the international order and would not necessarily provide solutions, Lipsky said.

US Treasury Secretary Scott Bessent on Friday launched an initiative calling for G20 countries, the IMF and World Bank to take coordinated action to ensure adequate access to fertilizers amid supply disruptions from Gulf countries. But seven weeks after the war's start, that will do little to ease shortages and high prices for farmers now planting spring crops across the Northern Hemisphere.

Kevin Chika Urama, chief economist at the African Development Bank, said the ‌Middle East crisis provided a fresh imperative for African countries to deepen regional trade and economic ties, work on alternative energy sources, expand their domestic tax bases, and tap into enormous natural gas reserves.

"Geopolitical tensions are the new normal ⁠and uncertainty in policymaking has become certain," he ⁠told a panel with other chief economists from the multilateral institutions.

NOT OUR WAR

Finance ministers, central bankers and other officials attending the meetings expressed frustration at being thrust into another economic calamity by Trump's actions.

Behind closed doors, officials, particularly from Europe, sent a clear message to the US that Washington needed to take action to reopen the strait, a senior finance official who attended the meetings said. In public, the comments were more diplomatic with less finger-pointing.

"The knot of this conflict is the Strait of Hormuz. We need this to open, but not at any price," French Finance Minister Roland Lescure told reporters. "I don't want to pay a dollar to go through the Strait of Hormuz."

Successive shocks, including this war, have scrambled planning for developing economies "and you hardly have time to breathe," Retselisitsoe Adelaide Matlanyane, Lesotho's Minister of Finance and Development Planning, said during a panel of African ministers.

"For small, open, and vulnerable economies like Lesotho, these shocks have presented extraordinary pressures on the fiscals, on prices and on everything."

Matlanyane said managing debt has now become very complex and the tensions have "brought on a sense that we have to rethink policy and we have to think differently."

"It's frustrating dealing with this," she told Reuters.

For Thailand, a net energy importer that will host IMF and World Bank annual meetings in October, the lingering effects of destroyed Gulf oil and gas infrastructure will keep prices elevated for a long time, said Ekniti Nitithanprapas, deputy prime minister of Thailand.

But he said the crisis was an opportunity for Thailand to reduce its reliance on fossil fuels and boost the role of renewable energy, including solar farms - the opposite of Trump's energy agenda. "We need to commit to transform... to help people transform to face the new fragmented world and high oil prices," Nitithanprapas said.



FAO: World Food Prices at Highest Since 2022 as Supply Risks Mount

A vendor loads coconuts into a cart to transport them by tricycle in Quezon City, Metro Manila, Philippines, 04 September 2026. EPA/ROLEX DELA PENA
A vendor loads coconuts into a cart to transport them by tricycle in Quezon City, Metro Manila, Philippines, 04 September 2026. EPA/ROLEX DELA PENA
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FAO: World Food Prices at Highest Since 2022 as Supply Risks Mount

A vendor loads coconuts into a cart to transport them by tricycle in Quezon City, Metro Manila, Philippines, 04 September 2026. EPA/ROLEX DELA PENA
A vendor loads coconuts into a cart to transport them by tricycle in Quezon City, Metro Manila, Philippines, 04 September 2026. EPA/ROLEX DELA PENA

World food prices rose in August to their highest since late 2022, as adverse weather and war disruption in the Gulf and Black Sea heightened concern over supply of staples, the United Nations' Food and Agriculture Organization said on Friday.

Extreme heat and drought in Europe, the threat of a severe El Nino weather pattern and trade upheaval caused by the Ukraine and Iran wars have unsettled agricultural markets, pushing grain prices to three-year highs and sugar to a one-year ⁠peak.

The FAO Food ⁠Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 133.3 points in August, up from July's revised reading of 130.8.

That was the highest score since November 2022, though nearly 17% below a record peak from March 2022, ⁠after Russia's full-scale invasion of Ukraine.

"August’s increase in global food prices is a warning that the risk premium is returning to food markets: climate shocks, geopolitical tensions and disrupted trade logistics are converging to tighten supply expectations," FAO Chief Economist Maximo Torero said in a statement, according to Reuters.

The FAO's price benchmarks for cereals, vegetable oils, sugar, meat and dairy all rose in August.

The extreme weather in Europe affected prospects for the maize and sugar beet ⁠harvests ⁠as well as livestock output, while the anticipated El Nino phenomenon fueled concerns for vegetable oil and sugar output, it said.

Escalating attacks in the Black Sea have curtailed grain shipments from Russia and Ukraine in their 4-1/2-year-old war, while the US-Iran conflict was still straining flows of fertilizer for crops.

In a separate report, the agency cut its 2026 global cereal production forecast by 3.4 million metric tons from July to 2.980 billion tons, now 2.0% below 2025, though still the second-largest harvest on record.


Nepal Floods Could Cost Insurers Over $130 Mln Even Before Death, Injury Claims

People hold onto a cage on a makeshift zip line as they cross the Trishuli River from Koloni following deadly flash floods that damaged bridges and temporarily stranded residents, in Nuwakot district, Nepal, September 4, 2026. REUTERS/Adnan Abidi
People hold onto a cage on a makeshift zip line as they cross the Trishuli River from Koloni following deadly flash floods that damaged bridges and temporarily stranded residents, in Nuwakot district, Nepal, September 4, 2026. REUTERS/Adnan Abidi
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Nepal Floods Could Cost Insurers Over $130 Mln Even Before Death, Injury Claims

People hold onto a cage on a makeshift zip line as they cross the Trishuli River from Koloni following deadly flash floods that damaged bridges and temporarily stranded residents, in Nuwakot district, Nepal, September 4, 2026. REUTERS/Adnan Abidi
People hold onto a cage on a makeshift zip line as they cross the Trishuli River from Koloni following deadly flash floods that damaged bridges and temporarily stranded residents, in Nuwakot district, Nepal, September 4, 2026. REUTERS/Adnan Abidi

The devastating flood in Nepal last week could result in commercial insurance losses exceeding 20 billion Nepali rupees ($132.3 million), with hydropower projects accounting for most claims, according to a top official at one of the country's leading insurers.

The insurance cover, when paid out, covers losses borne by the operators of the power plants.

Life insurance, personal accident and workers' compensation claims are expected separately as authorities verify deaths and missing persons in inaccessible areas.

The disaster on Nepal's border with China's Tibet region caused an estimated $2.56 billion in economic losses in the Himalayan nation of 30 million people, the country's disaster authority chief told Reuters on Friday, leaving more than 1,200 dead and many more missing.

Eleven ⁠Nepali hydropower projects ⁠lie in the affected region, some covered by standard commercial insurance policies that are still being assessed, Toton Chakraborty, CEO of Oriental Insurance Company Nepal, told Reuters.

Oriental Insurance Nepal, a unit of the New Delhi-based Indian insurer, is among the leading insurers in the region.

"Hydropower projects along the affected river corridor have suffered the largest damage. In many cases, access roads and above-ground infrastructure have been washed away," he said.

Projects including Rasuwagadhi, Upper Trishuli-3A, Chilime and Devighat, were directly affected, ⁠while assessments at five others are ongoing, he said.

Data from the Nepal Insurance Authority show the regulator has so far received 583 flood-related claims worth 25.87 billion Nepalese rupees ($171.13 million) as of August 31.

Chakraborty said these figures largely reflect insured exposure rather than final claims, which will only be clear once detailed surveys are completed.

Claims could rise further if repairs delay project commissioning, as some policies compensate developers for lost revenue resulting from postponed commercial operations, he said.

Nepal's non-life insurance market is small by global standards. The country's 14 non-life insurers generated premiums of about 5.3 billion Nepali rupees ($35.06 million) during July-August, regulatory data showed, compared with 314 billion Indian rupees ($3.3 billion) written by Indian insurers during a similar period.

The market is supported by domestic reinsurers ⁠Nepal Re and Himalayan ⁠Re, alongside international players including India's GIC Re and Germany's Hannover Re.

The floods could have lasting implications for insurance coverage of Himalayan infrastructure, four industry executives said.

The Himalayan region faces severe risks from earthquakes and any future glacial floods, a senior UN official told Reuters this week.

"The recent mountain floods in South Asia may lead insurers to further review hydropower and infrastructure risks, particularly in highly exposed locations," said Benjamin Ng, power leader for Asia at Aon, an international insurance broker.

Insurers may increasingly impose exclusions, lower sub-limits and narrow coverage, resulting in higher premiums and more selective underwriting, Ng said.

Other recent Himalayan catastrophes include the 2023 glacial lake outburst flood in India's Sikkim and the flash flood in the northern Indian state of Uttrakhand in 2021.

The latest floods could reshape industry views on risk accumulation and glacial lake outburst flood exposure, said Sanjay Mokashi, chief underwriting officer at Indian state-owned reinsurer GIC Re.


Gold Heads for Modest Weekly Gain as Investors Await US Payrolls Data

Gold jewelry is displayed at an exhibition in Kabul, Afghanistan, 03 September 2026. (EPA)
Gold jewelry is displayed at an exhibition in Kabul, Afghanistan, 03 September 2026. (EPA)
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Gold Heads for Modest Weekly Gain as Investors Await US Payrolls Data

Gold jewelry is displayed at an exhibition in Kabul, Afghanistan, 03 September 2026. (EPA)
Gold jewelry is displayed at an exhibition in Kabul, Afghanistan, 03 September 2026. (EPA)

Gold prices were steady on Friday and poised for a modest weekly gain, as traders' attention turned to key US payrolls data for clues on the Federal Reserve's next interest rate decision.

Spot gold held its ground at $4,469.26 per ounce, as of 0633 GMT. Prices jumped 2% on Thursday as traders scaled back expectations for a September rate ‌hike after Fed ‌Governor Christopher Waller said he would support ‌leaving ⁠rates unchanged if data ⁠continued to show inflation pressures moderating.

US gold futures for December delivery fell 0.5% to $4,515.70.

Traders are pricing in an about 50% chance of a Fed rate hike later this month, according to the CME FedWatch Tool.

The US nonfarm payrolls report is due at 1230 GMT.

"Weak figures and a ⁠rise in unemployment could weaken the case for ‌a rate hike. In ‌this case, gold could recover. However, the metal could remain exposed to ‌changing sentiment, with inflation data releases coming next week," ‌said Ross Maxwell, global strategy operations lead, VT Markets.

"The market continues to benefit from central bank demand, which could limit the extent of any decline."

Though gold is often viewed as an inflation ‌hedge, elevated interest rates tend to weigh on the non-yielding asset.

Data on Thursday showed the ⁠number of ⁠Americans filing claims for unemployment benefits rose marginally last week amid low layoffs, pointing to stable labor market conditions.

Meanwhile, US Vice President JD Vance said the fighting between Washington and Tehran was not a war and declined to provide a timeline for when the conflict would be over, underscoring the challenge the Trump administration faces as the hostilities enter their seventh month and mid-term elections loom.

Among other metals, spot silver fell 0.5% to $66.59 per ounce. Platinum lost 1.2% to $1,803.53 and palladium declined nearly 1.3% to $1,403.03, with both metals on track for slight weekly declines.