The IMF and World Bank have sounded the alarm on a deepening global economic crisis, but their response at the 2026 Spring Meetings has raised serious concerns, as they continue to promote policies that risk worsening the situation. 

Against the backdrop of the US and Israeli attacks in Iran and Lebanon, and the resulting surge in energy, food and fertiliser prices, the IMF presented stark warnings in its World Economic Outlook.  On the same day, a report issued by the United Nations Development Programme (UNDP) said that more than 30 million people worldwide could be plunged into poverty by the economic fallout from the Iran war, with developing countries expected to be hit hardest.

Yet, despite recognising the scale of the shock, the institutions largely stuck to business as usual. In response 65 civil society organisations from across the globe, including Eurodad, issued a public statement calling for urgent action. 

Jean Saldanha, Director of the European Network on Debt and Development said: “Instead of advancing urgent measures such as debt payment suspensions for crisis-hit countries, the IMF are offering more loans tied to austerity-driven reforms. 

“Calls to suspend IMF surcharges on countries like Pakistan and Egypt, strongly affected by the spillovers of the conflict, were ignored.”

At the same time a critical issue is reversing decades of anti/poverty gains: the collapse of international aid. Just days before the Spring Meetings the OECD announced that Official Development Assistance has been cut by almost 25 per cent - the steepest drop in recent history. 

Yet despite this worsening reality, the policy direction coming out of the meetings reflected a continued push for fiscal restraint. On job creation, the institutions continued to push for deregulation and private sector growth. It seems likely the US is using its power as the main shareholder in the Bretton Woods Institutions to impose their vision, including the efforts to shut down the World Bank and IMF work on climate. This was despite a strong call from the V20, the forum of most climate vulnerable countries, for their voice and their concerns to be prioritised by the institutions.  

Unfortunately the loud call for governance reform went unheeded this week. Following more than a year of discussions, and despite a World Bank report acknowledging misalignment, no agreement was reached on vote share realignment and no meaningful steps were taken to strengthen the voice of Global South countries.

Meanwhile, the newly endorsed ‘Diriyah guiding principles’ on IMF quota and governance reform falls far short of what is needed. By prioritising a “pragmatic and gradual” approach, they entrench existing power imbalances and delay the structural reforms required to make the Fund more representative and accountable. 

Jean Saldanha said: “Once again we see the IMF and World Bank adapting priorities and approaches to accommodate the position of the current US administration. It clearly highlights the need for long overdue reforms, an issue that Europe - which is currently overrepresented - has a big responsibility to address. Reform must ensure that the institutions’ policies cannot be held hostage to the most powerful shareholders on the Board. 

“As global risks intensify - from conflict-driven economic shocks to deep cuts in aid - the gap between the institutions’ warnings and their actions is becoming increasingly stark. Without urgent action on debt relief, adequate financing and governance reform, the IMF and World Bank risk exacerbating, rather than alleviating, the human and economic crisis unfolding worldwide.

“In this bleak context, the launch this week of the Borrowers Platform, an outcome of last year’s UN Financing for Development Conference in Sevilla, offers some hope. Today, we’re closer to rebalancing power inequalities in global economic governance. 

“Civil society is organising to ensure that calls for urgent and far-reaching actions and reforms are very visible at the Annual meetings, which will take place in Thailand in October.”

ENDS 

Media contact: Julia Ravenscroft, Communications Manager at the European Network on Debt and Development (Eurodad): [email protected]/ +44 7958184 695.