Ajay Banga said that the economic fallout from the conflict is already feeding into weaker global expansion, with both developed and emerging economies expected to feel the ripple effects in the coming days. It is worth mentioning that the ceasefire, announced by United States President Donald Trump last week, fell through as Tehran and Washington failed to reach a consensus in Islamabad.

“The risks deepen significantly if the conflict drags on. In a prolonged-war scenario, global growth could decline by as much as 1 percentage point, underscoring the fragility of the recovery and the sensitivity of markets to geopolitical shocks,” Ajay Banga said.

In fact, the World Bank sees emerging markets and developing economies bearing a disproportionate share of the global slowdown, with the projected growth rate now estimated at 3.65%, down from an earlier estimate of 4% made in October 2025. If the conflict continues, growth could fall sharply to 2.6%.

On the other hand, the emerging economies also need to deal with growing inflationary pressures, with the World Bank now forecasting the ratio at 4.9%, up from a previous estimate of 3%. In a worst-case scenario, inflation could surge as high as 6.7%, reflecting supply disruptions and higher energy costs linked to the Middle East conflict.

Ajay Banga’s comments come ahead of the crucial meeting in Washington, where top global finance professionals will meet to discuss the Iran war’s cascading effects, with a section of the analysts even calling the crisis the “third major shock,” after the COVID pandemic and the Russia-Ukraine war.

Top International Monetary Fund (IMF) and World Bank officials will be downgrading their forecasts for global growth and raising inflation predictions due to the war, keeping in mind factors like higher energy prices and supply disruptions.

Before the beginning of the Iran war on February 28, both global institutions were expected to lift their growth forecasts given the resilience of the global economy. However, the regional conflict, which is now steadily leaving its global imprints, has changed the equations.

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While the talks focused on improving worker skills, funding will be secured for purchasing 15 new locomotives, along with a study on maintaining existing locomotives to improve operational efficiency. Discussing the World Bank, the latter’s Syria Physical Damage and Reconstruction Assessment 2011–2024 report, released in October 2025, estimates Syria’s reconstruction costs at USD 216 billion following more than 13 years of conflict.

The civil war impacted almost one-third of the West Asian nation’s total assets, with direct damage to infrastructure, homes, and other buildings estimated at around USD 108 billion. According to the statement released by the participants after the meeting, the two sides also reviewed the phosphate transport corridor project and the importance of reassessing its economic feasibility to determine the necessary financial estimates, while clarifying the related figures to ensure its sustainability and effective development.

“Yarub Badr stressed the importance of continued cooperation with the World Bank in implementing infrastructure-related projects, noting that such cooperation contributes to accelerating Syria’s economic recovery,” the statement added, noting Carret’s affirmation about the World Bank’s willingness to back development initiatives in the war-ravaged country and stressing the importance of building a long-term, sustainable partnership.

While concluding the meeting, both parties agreed to convene a technical session in March to follow up on the key points discussed and fast-track cooperation between Syria and the World Bank in the relevant areas.

Yarub Badr also interacted with World Bank transport officials via video conference in February 2026, discussing the readiness of the railway network and the phosphate railway corridor project, including its economic and strategic significance.

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“Under the new design, metro routes will be tailored to the Iraqi capital’s geography and congestion levels,” Prime Minister’s Adviser for Investment Affairs Mohammed Al-Najjar told the media outlet.

“Ground-level tracks are estimated to cost USD 20–USD 30 million per kilometre, elevated lines USD 50–USD 70 million per kilometre, while underground tunnels – an option retained for densely congested centres—would cost around USD 200 million per kilometre,” Al-Najjar said.

“Earlier proposals relied heavily on underground construction, making them economically unviable,” he added.

In July 2025, Zawya Projects reported that the Mohammed Shia’ al-Sudani government was reassessing the financial framework for the project after previous proposals had been rejected.

Al-Najjar said Baghdad’s population growth—from around 3 million to nearly 10 million residents—and its expansion toward areas such as Al-Mahmoudiya required a complete reassessment of metro routes and designs. The updated plan now positions Baghdad Metro as the core of a wider transport network, linked with bus and tram systems to enable smooth passenger movement from stations to final destinations without worsening surface congestion.

The metro will be a fully automated and driverless system. While this raises upfront procurement costs, Al-Najjar said the move, in the long run, would lower long-term operating and maintenance expenses by removing the need for human train operators.

“The Al-Sudani government also plans to procure the project under a public–private partnership (PPP) framework, supported by a 30-year concession agreement to ease pressure on public finances,” Al-Najjar said, adding that the World Bank and the European Bank for Reconstruction and Development (EBRD) have expressed serious interest in participating as project partners.

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The lender stated that the funds will be released under the bank’s Public Resources for Inclusive Development – Multiphase Programmatic Approach (PRID-MPA), which could provide up to USD 1.35 billion in total financing, according to The Dawn.

“Around USD 600 million of this will be allocated to federal programmes, while USD 100 million will be allocated to a provincial programme in Sindh,” the media outlet stated.

The approval comes after a World Bank grant of USD 47.9 million in August 2025 to enhance primary education in Pakistan’s Punjab province.

In a separate statement, the lender quoted Bolormaa Amgaabazar, the World Bank’s country director for Pakistan, as saying, “Pakistan’s pathway to inclusive, sustainable growth lies in mobilising more domestic resources and applying them efficiently and transparently to deliver results for people.”

She stated that the MPA enables the bank to work with the federal and Sindh governments to “deliver on impact-more reliable budgeting for schools and clinics, fairer taxation, and better data for decision-making, all while protecting priority social and climate investments, and building public trust.”

Tobias Akhtar Haque, World Bank lead country economist for Pakistan, added that “strengthening the fiscal foundations was key to restoring macroeconomic stability, delivering results, and strengthening institutions.”

“Through the PRID-MPA, we are launching a coherent nationwide approach to support reforms that expand fiscal space, bolster investments in human capital and climate resilience, and strengthen revenue administration, budget execution, and statistical systems,” the official added.

“These reforms will ensure that resources reach the front line and deliver better outcomes for people across Pakistan with greater efficiency and accountability,” he concluded.

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This funding, part of a broader $1 billion recovery framework, aims to kickstart economic recovery and establish a foundation for long-term reconstruction in the country.

The initiative, officially termed the Lebanon Emergency Assistance Project (LEAP), comes as Lebanon grapples with the aftermath of conflict and years of economic collapse, offering a glimmer of hope that essential services can be restored and growth revived.

Lebanon’s economic crisis

Lebanon has been in the throes of one of the world’s worst economic crises since 2019. A combination of financial mismanagement, political paralysis, and external shocks has caused living conditions to plummet.

Lebanon’s economy has suffered a catastrophic collapse. Its GDP shrank by nearly 40%, effectively wiping out years of growth and reducing incomes across the board. The Lebanese pound has lost over 98% of its value, turning what was once 1,500 pounds to a dollar into a rate of tens of thousands, decimating household savings and purchasing power.

This currency freefall triggered triple-digit inflation through 2023, making basic goods unaffordable and pushing a large portion of the population into poverty. At the same time, the banking sector imploded, deposits were frozen, and trust evaporated, forcing the country into a cash-based, dollarized shadow economy. By 2022, around 45.7% of GDP, or $9.8 billion, circulated outside the formal banking system as citizens increasingly relied on hard currency to survive.

This economic freefall was compounded by other disasters. A massive explosion in Beirut’s port in 2020 caused billions in damages, and years of political gridlock left Lebanon without effective reforms or a stable government.

Public services such as electricity, water, healthcare, and education have drastically deteriorated. Even before the latest conflict, Lebanon was described as a nation in “crisis upon crisis,” dealing with financial collapse, a refugee burden, and infrastructure decay.

Yet, by mid-2023, there were fragile signs of stabilisation. In a bid to control hyperinflation, authorities unified exchange rates, and the Lebanese pound’s rampant depreciation slowed. Since July 2023, the pound has stabilised at around 89,500 LBP to $1, which helped tamp monthly inflation down from triple digits to more manageable levels. By 2024, inflation even fell to double-digit percentages, the first time since early 2020 that price growth was below 100%.

The World Bank noted in June 2025 that if political stability and reforms hold, Lebanon’s economy could see modest growth of around 4.7% in 2025, a remarkable turnaround after years of contraction. However, this outlook remains extremely fragile and contingent on sustained reforms and stability.

Just as Lebanon was trying to stabilise its economy, it was hit by a new shock: a spillover of regional conflict. Beginning in October 2023, fighting flared between the militant group Hezbollah (based in Lebanon) and Israel, amid a broader regional war. Clashes and hostilities along Lebanon’s southern border and even strikes in Beirut’s suburbs caused significant destruction.

A Rapid Damage and Needs Assessment by the World Bank found that between October 8, 2023, and December 20, 2024, the conflict inflicted an estimated $7.2 billion in direct damage across Lebanon.

The devastation spanned 10 sectors, from homes and businesses to infrastructure. Critical public infrastructure vital to communities’ well-being and economic activity was hard-hit, with roughly $1.1 billion in damage to key facilities.

World Bank $250M Lebanon recovery plan

In response to these extraordinary needs, the World Bank launched the Lebanon Emergency Assistance Project (LEAP), beginning with a $250 million financing approval in June 2025. This project is structured as part of a scalable $1 billion framework, meaning the World Bank’s initial contribution can absorb and coordinate additional funds (from other international donors or lenders) up to that amount.

The idea is to create a unified, government-led reconstruction programme that others can join, rather than a scattershot of uncoordinated aid projects.

Jean-Christophe Carret, the World Bank’s Middle East director, explained that LEAP’s structure “emphasises transparency, accountability, and results” to serve as a credible vehicle for partners to align their support with Lebanon’s own reform agenda. In other words, the framework is meant to assure donors that funds will be well-managed and impactful, encouraging them to contribute and “maximise collective impact” on Lebanon’s recovery.

According to the World Bank, the project takes a phased approach focusing on fast, high-impact interventions first. Initial actions aim to restore basic services and normalcy for the population as quickly as possible. Some priority components include:

The initial funding will focus on high-impact, phased interventions designed to kickstart Lebanon’s recovery. One key priority is the safe and efficient removal of war debris, with an emphasis on recycling and reuse to reduce waste and supply materials for reconstruction, while also addressing public safety and health concerns.

The project will also rapidly repair essential services such as electricity, water supply, transportation infrastructure, healthcare, education facilities, and municipal services, enabling communities to resume daily life and stimulating local economies. Beyond emergency fixes, LEAP will lay the groundwork for long-term rebuilding by financing technical designs and environmental and social assessments for major infrastructure like roads, bridges, and power stations.

To ensure impact and avoid dilution of resources, interventions will be guided by a data-driven, area-based prioritisation strategy endorsed by Lebanon’s Council of Ministers, focusing on the most severely affected regions and projects that promise the greatest social and economic return.

The initiative’s emphasis on “response, recovery, and reconstruction” in phases means it will tackle immediate needs while laying groundwork for medium- and long-term projects. For example, repairing a vital water pumping station now (recovery) can be paired with plans to completely modernise the water network later (reconstruction).

This sequencing is designed to yield tangible improvements in daily life within months, which is crucial for public morale and economic activity, while not losing sight of the larger rebuilding that may take years.

Rebuilding infrastructure is not just about bricks and mortar; it is fundamentally about reviving the economy and livelihoods. Modern economics has plenty of evidence that post-conflict reconstruction, when done efficiently, can stimulate growth by creating jobs (especially in construction), improving productivity, and restoring investor confidence. In Lebanon’s case, the swift repair of infrastructure and public services is a precondition to economic and social recovery.

Businesses cannot operate during constant power outages, farmers cannot irrigate crops with broken water systems, and children cannot learn if schools remain closed. By focusing on these basics, the World Bank project aims to create the conditions for normal economic activity to resume in affected areas.

The injection of $250 million (with prospects of scaling up) also provides a much-needed fiscal stimulus in an economy starved of investment. Lebanon’s government, essentially bankrupt, has a very limited ability to spend on capital projects.

International aid thus fills a critical gap by funding projects that hire local workers and contractors, purchasing materials (many of which are locally sourced or supplied), and circulating money in the economy.

For example, rubble-clearing initiatives will employ local labour and engineers; repairing schools means contracts for construction firms and suppliers. These activities have multiplier effects that can boost local incomes and consumption.

However, analysts caution that international aid alone cannot solve Lebanon’s crisis. Aid is most effective when paired with sound economic management and reform. The World Bank itself has pointed out that Lebanon’s longer-term recovery hinges on addressing root issues, including a dysfunctional banking sector, unsustainable public finances, and the lack of a reliable social safety net.

The LEAP project is occurring alongside renewed calls for Lebanon to implement a comprehensive reform program (as outlined in a recent Lebanon Economic Monitor report) to restore macro-financial stability and citizens’ trust.

Banking sector sees reform

In July, the momentous economic reform in Lebanon’s history took place, as the country’s Parliament passed a major piece of legislation to finally begin restructuring the country’s broken banking sector, nearly six years after its collapse. This marked the first serious step by lawmakers to tackle the country’s unprecedented financial crisis, which has left millions of depositors locked out of their savings since 2019.

One of the main conditions set by international lenders for financial assistance has been the passage of a bank restructuring law, alongside other key legislation. In April, Lebanon amended its banking secrecy law, ending decades of financial opacity. Washington and the IMF were among those believed to be pushing Beirut to fast-track such reforms to unlock bailout funds.

The Bank Restructuring Law should establish a legal and institutional framework for dealing with insolvent or “zombie” banks, those that have no capital and are unable to operate. The new legislation will replace the existing Banking Control Commission with a new Bank Restructuring Authority, empowered to restructure, recapitalise, merge, or liquidate failing banks. The aim is to stabilise the sector and pave the way for returning funds to small and medium depositors.

In other good news, S&P Global Ratings has raised Lebanon’s long-term local currency credit rating to “CCC” from “CC,” while maintaining a stable outlook and affirming its foreign currency rating at “SD” (selective default). This upgrade indicates an improving ability of the government to service its local currency commercial debt, supported by fiscal surpluses over the past two years and progress on reforms needed to access a new IMF programme.

Still, S&P does not expect major progress on debt restructuring before parliamentary elections in May 2026. The ongoing conflict between Israel and Hezbollah continues to weigh on recovery prospects.

Path to sustainable recovery

In essence, rebuilding physical infrastructure will provide only temporary relief unless accompanied by policy reforms that restructure the banking system, enforce anti-corruption, and create a conducive environment for private sector growth.

International institutions like the IMF are still looking for Lebanon to unify its multiple exchange rates, recapitalise banks, and reduce its deficits, steps necessary to unlock larger-scale financial assistance.

For the Lebanese people, weary of crisis after crisis, this initiative offers a rare bit of good news, namely a plan to rebuild, backed by global support. If managed prudently, this recovery boost could mark the first steps on a path toward economic normalcy and renewed hope in a country that has endured far too much hardship in recent years.

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Following the attack, US Treasury Secretary Janet Yellen, a former chair of the US Federal Reserve, issued a warning.

Janet Yellen said, “We will need to modernise our existing institutions—the IMF and the multilateral development banks—so that they are fit for the 21st century, where challenges and risks are increasingly global.”

She added that the defeat of Russia calls for actions that the World Bank and IMF might not be able to implement.

Yellen, a pivotal figure in the previous Joe Biden administration, was referring to a wide range of issues, including trade disputes that are getting worse, sanctions against Russia, big-power rivalry that is causing geopolitical tensions, and—perhaps most worrying of all—the deterioration of the 80-year-old Bretton Woods institutions that were initially created for this very reason.

Bretton Woods had a crucial role in saving a globe ravaged by conflicts, poor leadership, and geopolitical uncertainty.

Earlier this year, IMF Managing Director Kristalina Georgieva said, “The IMF was formed in 1944 from the wreckage of two world wars. The old-world order was in ruins, and populism had taken over most of the world in the decades before we were born. The IMF was crucial to the world’s remarkable advances in global integration and well-being following Bretton Woods.”

When representatives from 44 countries, led by the United States and the United Kingdom, convened in New Hampshire for the so-called United Nations Monetary and Financial Conference in July 1944, Bretton Woods was established. From the wreckage, they established a new, globally coordinated economic system aimed at growth and restoration. Thus, they established the World Bank and IMF.

“Eighty years later, the global economy is once again in a moment of significant turmoil as countries recover from the pandemic and conflict has flared across Europe, the Middle East, and Africa,” Georgieva continued, “but here we are again. The question that remains in the midst of all of this is whether the Bretton Woods Institutions (BWIs) can handle the demands of a much larger and more intricate global economy. If not, what other options are there?”

Georgieva summarised, “We still face many of the same challenges as when we first started. A military force has once again invaded a neighbour in Europe, and regional conflicts are escalating, increasing the risks to the entire world. Once more, protectionism and populism are growing. In addition, we are battling disruptive technologies like artificial intelligence (AI) and virtual currencies, as well as global megatrends like climate change and the demographic shift.”

Fragmentation of the world economy

The majority of economists concur that, just when the world needs to avoid it, it is breaking apart into Global Economic Fragmentation (GEF).

GEF is seen as a policy-driven reversal of global economic integration that makes it less likely for countries to work together to solve global crises, stops new ideas from spreading in emerging markets, and risks sending money to countries with low incomes. In other words, by concentrating on ourselves, we are regressing.

The IMF, which is facing the possibility of becoming obsolete, explains that “in our increasingly fragmented world, nations have focused on reshoring essential goods and supply chains, including minerals crucial for green technologies, semiconductors, and military hardware due to concerns over national security and geopolitical motives.”

Higher import prices, divided markets, limited access to labour and technology, decreased productivity, and a decline in living standards are the direct consequences, according to the IMF.

Bretton Woods had a crucial role in saving a globe ravaged by conflicts, poor leadership, and geopolitical uncertainty.

Tariffs, subsidies, currency wars, protectionism, industrial policies, and penalties are the causes of this fragmentation. Together, they are suppressing the international trade that may help turn things around. In summary, nations are choosing their own paths and taking opposing positions. This generally undermines Bretton Woods’ primary goal of global financial stability.

Many nations are therefore at risk of experiencing a decline in their wealth. According to recent studies, developing markets and mature economies may suffer long-term losses of up to 4% of GDP. The repercussions? Food insecurity, social unrest, and debt problems, with the most vulnerable countries suffering the most.

A new IMF report estimates that the spread of GEF might result in a long-term drop in global economic production of up to 7%. That would come at a disastrous cost, estimated at over $7.4 trillion.

A situation at a crossroads

Although the phrase is frequently used, economists are certain that we are at a crossroads once again and are not even close to reaching a consensus on a Bretton Woods-style solution.

“We can choose to pursue a path of instability and conflict in the future. Or we can decide on the route of collaboration and mutual gain,” Georgieva said.

However, is it feasible to reform the BWIs? The IMF and the World Bank are facing “existential challenges,” according to macroeconomist Amin Mohseni-Cheraghlou of American University in Washington, DC, who is also the head of the Atlantic Council’s Bretton Woods 2.0 Project.

He provides a long list of examples to support his claims, including the rise of new competitors, revolutionary new technologies like artificial intelligence, and two decades of social and economic upheavals like the Great Financial Crisis, the destruction caused by COVID, and the severe issues brought on by climate change, especially in Sub-Saharan Africa. Furthermore, as non-Western economists frequently note, the GFC and climate change are two of these ills that originated in the West.

Mohseni-Cheraghlou asserts that a significant problem in BWIs is the concentration of power in the wrong hands. In other words, at a time when “economies that are not part of the high-income club are playing an increasingly large role in global trade and finance,” the leadership is firmly rooted in the US, Group of Seven (G7), and European Union (EU).

The United States and the European Union hold almost 40% of the votes, even though “their relative prominence in the global economy has eroded.” Chinese scholars concur, pointing out that Beijing has been denied a position in the BWIs that, in their opinion, is appropriate given its undeniable economic power.

Professor Qin Yaqing, a political scientist at Shandong University, is adamant that a global governance structure that is “multi-level, multi-issue, and multi-organisational” must take the place of what he refers to as “US hegemony” over these institutions. In fact, he shares Beijing’s belief that economic fragmentation is best for China.

It would enable China to “choose allies to achieve various objectives and operate nimbly across regions, issues, and organisations.”

He contends that the disintegration of global governing organisations would ultimately contribute to the collapse of the former hegemonic system.

The belt and road initiative

The majority of Western nations, along with several Asian ones, are undoubtedly concerned about China assuming a more aggressive leadership role in a post-Bretton world. They’re halfway there already. China’s Belt and Road Initiative (BRI) has drawn other nations into Beijing’s web, as noted by American political scientists.

As could be predicted, two of the 24 United Nations members that voted not to denounce Russia’s invasion of Ukraine were North Korea and Russia, while the other 22 are all Belt and Road beneficiaries. The fact that 49 out of the 58 countries that did not cast ballots are also involved in the Belt and Road is maybe more indicative of China’s own predominance among the more disgruntled countries.

We have the option of going down the route of instability and conflict. Or we might decide to follow the route of mutual prosperity and cooperation.

Since their own coffers are far from deep enough, the IMF and World Bank now have to deal with a far more complicated world of international financing.

According to Yellen, “We have been working in billions so far, and experts put the funding needs in the trillions.”

Positively, there are many new lenders available, including sovereign wealth funds, pension funds, regional multilateral development banks, and state-led development finance organisations.

For example, there were more than 40 multilateral development banks and financial institutions at the time of the previous count, but there are now at least 50 solely national development banks. Additionally, a total of 130 sovereign wealth funds are investing $12 trillion. While private pension funds have $42 trillion in assets in their treasuries, public pension funds have $24 trillion worldwide.

Furthermore, the number and financial clout of multinational firms has skyrocketed in the past eight decades.

They “command economic and technological might larger than many countries,” according to Mohseni-Cheraghlou.

Multinational corporations account for a quarter of all jobs worldwide and nearly one-third of the global GDP, based on solid data. In fact, Walmart alone generated more income in 2023 than the GDP of over 170 countries.

To sum up, Bretton Woods was built for a different time period and urgently has to be updated to meet the demands of this new, far more complicated one. The Nixon administration’s 1971 removal of the gold standard, a significant disruption to the system, exemplifies how the institutions have adeptly navigated past challenges.

Despite the challenges posed by “intractable geopolitical tensions,” the Bretton Woods table presents numerous benefits. Some of these, according to economists, include an unjust global tax system, a role in responding to crises like COVID (Yellen thinks the GFC response was “too timid and short-lived”), the quick mobilisation of capital to aid developing nations, and World Trade Organisation reform (China prefers regional trading blocs that allow it to get around WTO regulations). All things considered; this massive package is poised to challenge the foundations of Bretton Woods.

While the Bretton Woods institutions were pivotal in rebuilding the global economy after WWII, their current structure and mechanisms appear outdated in addressing the complexities of today’s interconnected and fragmented world.

The rise of new economic powers, shifting geopolitical dynamics, and evolving global challenges require a radical overhaul of these institutions to ensure they remain effective. This is no small task, but the alternative—a more fragmented world without coordinated economic governance—could be far more destabilising. As the global landscape continues to evolve, the question remains whether the BWIs can adapt in time or if we will see the rise of new structures altogether.

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Ajay Banga stated in a Reuters NEXT Newsmaker interview that while the war has so far had a minor effect on the world economy, a major expansion of the conflict would attract other nations that contribute more to global growth, such as commodity exporters.

“First of all, I think this unbelievable loss of life – women, children, others, civilians, is just unconscionable on all sides. The economic impact of this war, on the other hand, depends a great deal on how much this spreads,” Ajay Banga said.

“If it spreads regionally, then it becomes a completely different issue because now you start going into places that are far larger contributors to the world economy, both in terms of dollars, but also in terms of minerals and metals and oil and the like,” he observed.

Though Israel’s strongest ally, the United States, has stated that it will continue to support Israel and is sending troops and an anti-missile system, some Western nations are pressing for a ceasefire in Gaza and between Israel and Lebanon.

Israel’s offensive against Hamas began following their October 7 attack on Israel.

According to Gaza’s health authorities, more than 42,000 Palestinians have died in the offensive so far. The Lebanese Health Ministry reports that over 11.2 million people have been displaced as a result of Israeli strikes, which have also killed at least 2,350 people in Lebanon over the past year and injured close to 11,000 others.

According to Ajay Banga, the destruction caused by Israel’s bombing of southern Lebanon will contribute to the USD 14–20 billion in war damage that has already likely resulted from Israeli strikes on Gaza.

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The World Bank also mentioned in its most recent Commodity Markets Outlook that a significant outbreak of the crisis in the area might stop the decline in inflation and boost commodity prices all around the world.

“If the conflict in the Middle East were to escalate further…oil-supply disruptions could push up global inflation,” the Washington-based international organisation said, as reported by Zawya.

Brent prices could reach USD 92 per barrel with a mild supply disruption, while oil prices could reach more than USD 100 with a severe escalation of tensions.

Earlier in April 2024, the price of a barrel of Brent crude oil rose to USD 91—nearly USD 34 more than the average price between 2015 and 2019.

“Global inflation remains undefeated. A key force for disinflation – falling commodity prices – has essentially hit a wall. That means interest rates could remain higher than currently expected this year and next. The world is at a vulnerable moment: a major energy shock could undermine much of the progress in reducing inflation over the past two years,” Indermit Gill, World Bank Group’s Chief Economist and Senior Vice President said.

Commodity Prices

After posting a sharp decline, commodity prices are now levelling off globally. Prices decreased by almost 40% between mid-2022 and mid-2023. Nonetheless, the World Bank’s index of commodity prices hasn’t changed significantly since the middle of 2023.

If geopolitical tensions do not escalate, the bank predicted that commodity prices would drop by 4% in 2025 and 3% in 2024. However, since most countries’ central banks still target higher rates of inflation, the rate of decline will not significantly reduce it.

Gold is predicted to reach a record high this year and then gradually decline in 2025. This year, increased geopolitical challenges and robust demand from multiple central banks in developing nations will support prices.

A major gas supplier, the Middle East conflict, is also causing price increases for food, fertilisers, and natural gas, according to the bank.

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The World Bank’s Regional Vice President for Eastern and Southern Africa, Victoria Kwakwa, told Reuters in an interview that it may advance by straying from the central bank’s “quasi-fiscal operations.”

The International Monetary Fund stated in January 2024 that the central bank should cut back on its non-core operations, which have included printing money and borrowing to lend to the government. However, she did not specify what those operations were.

With annual inflation at 47.6% and the Zimbabwean currency has lost over 60% of its value vs. the US dollar thus far this year, the nation is still reeling from the memory of hyperinflation under longstanding former leader Robert Mugabe.

“The lack of confidence is the fundamental cause of the issue,” Kwakwa stated.

“And people strive to get rid of it to buy something else every time they get the cash; thus, its value is always declining,” the senior World Bank official continued further.

After ten years of dollarisation, the local currency was reintroduced in 2019, but it quickly lost value, leading the authorities to approve the use of foreign currencies in domestic transactions.

The finance ministry and central bank announced recently about working on ways to stabilise the value of the currency and that they were thinking about tying the exchange rate to the price of gold among other things.

“More confidence will be built through policy predictability and the advances being made in moving away from quasi-fiscal operations,” Kwakwa noted.

According to her, the World Bank is “committed” to the ongoing process that Zimbabwe has been going through since 2022 to pay off billions of dollars in arrears to the organisation and other foreign lenders.

Kwakwa, meanwhile, expressed her “pleasure” at the news that China and India had reached debt restructuring deals with Zambia. The President of Zambia announced the accords in February 2024, raising optimism that Zambia would be on the verge of exiting its more than three-year default.

After settling with the official creditors, the government may now concentrate more on settling with the commercial creditors. And we’re hoping that will happen shortly as well,” she stated.

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The Department takes a proactive role in providing an ideal business environment to stimulate internal and external investments, through the enactment of laws and legislation regulating market movement, in addition to providing appropriate facilities for entrepreneurs and investors.

The Department’s strategic plan revolves around improving the real estate investment environment, contributing to economic growth, and enhancing competitiveness concept in registering real estate properties, in addition to developing and empowering the competencies of the sector and qualifying the ongoing projects to keep up with the rapid pace of growth witnessed by the Emirate of Ajman in various fields, including the real estate sector.

The city of Ajman ranked first in the Arab world and fifth globally, in terms of property registration, according to the results of the World Bank’s latest Ease of Doing Business Index.

The Department of Land and Real Estate Regulation in Ajman received a five-star rating according to the Global Star Rating System for Services. It also won the Ajman Government Excellence Award for Comprehensive Experience Category for Government Services, and other prestigious awards, which reflects the department’s level and its keenness to achieve leadership and sustainable excellence.

The Department has adopted innovation in all its services and succeeded in achieving comprehensive digital transformation.

The automation of processes has facilitated the work of investors and provided them with several qualitative services, as traders can now know the estimated value of vacant lands in the Emirate of Ajman based on market data, which helps to know the value of the land during purchase or sale operations, and thus ensure transparency in the sector through official quick references and continuous updating of prices.

As of October 2023, the department is offering the A-Z of real estate-related services in the Emirati city, be it issuing project permits and testimonies, registration of ownership merging/allotment of the project, overlooking transaction-related activities, conducting regular inspections/surveys of the ongoing projects to ensure that the initiatives are meeting globally prescribed standards, determining the property value, enabling the application for the property’s mortgage registration, allowing the industry stakeholders to promote their projects and so on.

Also, the department has brought a groundbreaking innovation called ‘eServices’, where the electronic calculation gives an estimated value to vacant lands in the Emirate of Ajman based on market data and assists owners and investors in knowing the value of land upon sale or purchase, thereby ensuring the transparency in the sector by official and quick references and a continuous price updating method.

To boost the accuracy of ‘eServices’, the department is assisting the tool with ‘Electronic Calculation’ and ‘Tamleek Fees Calculator’. The department has also launched an app called the ‘Ajman One’, which comes with exceptional specifications and standards, combining ease, flexibility, privacy and security.

‘Ajman One’ is a unified app that has all the services that the customers and visitors of the Emirati city need. Also, the Department of Land and Real Estate Regulation has created a portal called ‘Open Data’ on its website, where all the data related to ongoing real estate projects and transactions have been made online.

To enhance electronic services, the Department of Land and Real Estate Regulation launched the ownership fees calculator (Tamleek), in addition to the “Ajman One” application, which includes all the services the customer needs. The application also has exceptional specifications and standards that combine ease, flexibility, privacy and security.
The Department of Land and Real Estate Regulation also established the “Open Data” portal on its website, where all data related to ongoing real estate projects and transactions are conducted online.

The ‘Ajman Government Excellence Award for Comprehensive Experience Category for Government Services’ gives a strong testimony to the pioneering efforts the Department of Land and Real Estate Regulation has been exerting to change Ajman’s real estate scenario, while achieving sustainable excellence and leadership at various levels.

Talking about the way ahead, the Department, in the coming days, is going to adopt the best financial practises and innovative technological methods in the financial field and rationalise expenses, apart from automating all its operations, in line with the strategy of the Ajman government and its endeavours aimed at raising the efficiency of financial performance and government work in general.

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