IMF Chief Highlights Costly Debt Impact from Hormuz Closure on Emerging Economies

The International Monetary Fund’s Managing Director Kristalina Georgieva warned that a shutdown of the Hormuz Strait could dramatically raise the cost of borrowing for countries across the globe, especially those with fragile fiscal positions. While the strait’s traffic fell to six vessels on Wednesday – down from eleven the previous day and below the ten‑day average of thirteen – the economic reverberations could be far more severe.

Georgiev a explained that the narrowing of a vital oil‑transport corridor lifts global bond yields as investors price in higher inflation and supply‑chain disruptions. Higher yields translate into steeper debt‑service payments for both developed and developing economies. She stressed that the issue is not confined to low‑income countries; even advanced markets with elevated debt ratios could feel the strain.

The reduced traffic list, released by ship‑tracking firm Keller, included two large gas carriers, two long‑range crude tankers, one suezmax and one panamax tanker. The decline coincides with renewed US‑Iran tensions that have heightened security concerns for vessels navigating the narrow passage. Iran’s recent blacklisting of several ships adds another layer of risk for oil and gas trade.

Georgiev a’s message, delivered during a G20 session in North Carolina, called for coordinated international action to keep the strait open and to mitigate the looming debt burden on vulnerable economies.