World Bank Weighs New Aid For Struggling Nations

The World Bank is discussing possible crisis assistance with dozens of countries facing pressure from rising energy costs and higher prices. President Ajay Banga said the institution was in talks with around 30 to 40 countries about ways to respond to the growing economic strain. The discussions come as governments deal with expensive fuel, costly fertiliser and uncertainty linked to the conflict in the Middle East. Developing economies are especially exposed because many already face high debt and limited room to increase public spending.

The bank had previously made an initial $25 billion in crisis funding available after the war began. However, demand was lower than expected at first, partly because many economies adjusted to changes in oil supply and demand. Conditions have since become more difficult for some countries. Higher diesel and fertiliser prices can raise the cost of transport, farming and food production. These increases may place additional pressure on household budgets and make it harder for governments to control inflation.

Banga said countries may seek more support in the coming months, including by moving money from approved projects toward urgent needs. The bank could expand its assistance if the crisis becomes more severe. It is also seeking to attract private investment to help countries support development and create jobs. The wider challenge is to provide quick help without adding unsustainable debt. For governments, the coming months may require difficult choices between immediate relief and long-term investment in education, health care and infrastructure.