Bangkok finance meetings face Iran war fallout and mounting global economic risks

Bangkok, Thailand. Finance officials worldwide are gathering in Bangkok this week as an expanding Middle East war, a record energy supply disruption and higher interest rates threaten already weak global growth. The annual IMF and World Bank meetings will be dominated by the US-Israeli-led conflict with Iran, now in its eighth month, and the inflation it is driving.

Attendance rises despite senior absences

The meetings are taking place away from Washington for the first time in three years, with the war expected to shape both formal discussions and exchanges on the sidelines.

During a Sunday evening tour of the Queen Sirikit National Convention Center, which covers 300,000 square meters, IMF Managing Director Kristalina Georgieva told Reuters that registration had reached 18,000. That is 4,000 above attendance at the previous off-site gathering, held in Morocco in October 2023.

US Treasury Secretary Scott Bessent will not attend. A US official said he had sent two senior officials instead while attending to “domestic engagements”. Federal Reserve Board Chairman Kevin Warsh will be present and is scheduled to join Georgieva for a public event on October 16.

Georgieva said domestic budget responsibilities and election-related duties were also keeping several other finance ministers at home, although most central bankers would attend.

Bessent will also miss a meeting of the Group of 20 major economies, which the United States leads this year. His absence from both gatherings could frustrate counterparts as tensions increase over the Iran conflict, Ukraine’s resistance to Russia’s invasion and US sanctions targeting the International Criminal Court.

Energy, food and weather pressures converge

World Bank President Ajay Banga told Reuters that global growth had proved more resilient than feared after Iran shut the Strait of Hormuz, cutting off approximately 20% of global oil supplies. He said pressures were nevertheless intensifying again.

Banga pointed to sharply higher diesel prices, increasing fertilizer costs and an approaching “super” El Niño weather effect. Experts say that weather phenomenon could cause 450,000 deaths linked to heat.

Emergency releases and a Russian diesel deal

The Group of Seven has agreed to draw 100 million barrels of diesel and crude from emergency reserves following pressure from US President Donald Trump. Trump wants gasoline prices to fall ahead of November elections, in which his Republican Party could lose its congressional majority.

On Friday, Trump announced an agreement with Russia to bring additional diesel onto international markets, alongside a temporary exemption from US sanctions intended to limit Moscow’s revenue for its war against Ukraine. Ukrainian President Volodymyr Zelenskiy quickly criticised the move.

Accessible oil inventories diminish

Since the war began on February 28, releases have exceeded 1 billion barrels of oil, drawn chiefly from commercial stocks held onshore.

Industry executives say stored oil available to international buyers is becoming scarce, leaving the market more vulnerable and adding upward pressure to prices.