Finance ministers and central bank governors are arriving in Bangkok for the annual meetings of the International Monetary Fund and World Bank as soaring energy costs and rising public debt place the global economy under renewed strain.
More than 15,000 participants from 191 countries are expected to attend the meetings from October 12 to 18. Although discussions will cover economic growth, artificial intelligence, jobs and private investment, the immediate concern is how governments can manage another inflationary shock without worsening already fragile public finances.
The prolonged Middle East conflict has disrupted energy shipments through the Strait of Hormuz, which normally carries about one-fifth of the world’s oil supply. More than one billion barrels have reportedly been drawn from commercial inventories since the conflict began, while governments are releasing emergency reserves to prevent further increases in fuel prices.
That cushion is becoming thinner. Diesel prices and fertiliser costs are climbing, accessible oil inventories are declining and attacks around alternative shipping routes have increased freight and insurance expenses. The recent shutdown of nearly 1.3 million barrels of daily production in the US Gulf of Mexico has added another temporary constraint to an already vulnerable market.
Energy inflation is now colliding with a debt problem that has been building since the pandemic. IMF estimates show global public debt rose to almost 94% of gross domestic product in 2025 and is projected to reach 100% by 2029, a level previously recorded only in the aftermath of the Second World War.
Higher interest rates make that debt more expensive to refinance. Governments must devote a larger share of revenue to interest payments even as they face demands for fuel subsidies, food support, defence spending, climate adaptation and investment in public services.
The pressure is already visible in sovereign debt markets. A recent global bond sell-off pushed the US 10-year Treasury yield to a 19-year high, raising borrowing costs across advanced and emerging economies. Developing countries face an additional risk as higher American yields attract capital towards dollar-denominated assets, weakening local currencies and making imported fuel more expensive.
The World Bank is discussing possible crisis assistance with between 30 and 40 countries affected by the energy shock. An initial $25 billion facility was established when the Middle East conflict intensified, while approximately $35 billion more could be redirected from approved projects. The institution could eventually make as much as $100 billion available if conditions deteriorate.
Many governments, however, are reluctant to take on more loans. Developing countries are expected to owe approximately $400 billion to external creditors during 2026, leaving them with limited capacity to borrow their way through another crisis. Some are instead seeking to restructure existing projects or refinance expensive obligations through guarantees and debt-for-development arrangements.
The burden is particularly severe for countries that import both fuel and food. Higher oil prices increase transport and electricity costs, while expensive natural gas raises the price of fertiliser. That combination can quickly feed into food inflation, weaken currencies and force governments to choose between supporting households and meeting debt repayments.
Pakistan and Bangladesh have already introduced measures to reduce fuel consumption as import costs and electricity shortages intensify. Across Africa, annual external debt-service payments increased from $61 billion in 2010 to $163 billion in 2024, reducing the money available for education, healthcare and infrastructure.
The Bangkok meetings will therefore be judged by whether they produce faster and more affordable assistance rather than another broad warning about global risks. Without coordinated debt relief, emergency financing and measures to stabilise energy supplies, vulnerable economies may be forced into deeper austerity precisely when their populations need greater protection.
