Washington: The International Monetary Fund has said developing countries facing economic shocks from the Middle East war have little choice but to cut spending, warning that many are already grappling with limited fiscal space.

An IMF official said the institution was advising countries to prioritise essential spending while tightening budgets, as rising energy and food import costs and reduced tourism revenues put pressure on already strained public finances. The Fund noted that high debt levels had left many developing economies with limited room for manoeuvre, forcing them to make difficult choices between supporting vulnerable populations and maintaining fiscal stability.

The comments come as the conflict continues to disrupt global energy markets and supply chains, with rising fuel costs hitting import-dependent economies particularly hard. The IMF has previously warned that prolonged high oil prices could push some countries into debt distress.

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