According to the United Nations Development Program (UNDP), the economic impact of the Iran war could push more than 32 million people into poverty worldwide, with developing countries expected to be hardest hit.The report, released amid uncertainty over the fragile ceasefire, said the world economy faces a “triple shock” from rising energy prices, food insecurity and slowing economic growth. It warned that the conflict is reversing development gains, with uneven impacts across regions.Energy prices have risen over the past few weeks since US-Israeli air strikes on Tehran, a situation worsened by Iran’s closure of the Strait of Hormuz, disrupting global oil and gas supplies. Its impact has also extended to fertilizer supply and shipping, raising concerns about growing food crises in developing countries.UNDP outlined three scenarios for the economic impact of the war. In a worst-case scenario – major disruption to oil and gas production for several weeks followed by higher costs for several months – 32.5 million people could fall into poverty. This estimate is based on the World Bank’s upper-middle-income poverty line of $8.30 per person per day.Nearly half of the increase in poverty will be concentrated in 37 energy importing countries in the Gulf, Africa, Asia, and small island developing states.“This kind of conflict is counterproductive to development. Even if the war stops and a ceasefire is obviously very welcome. But the impact is already there,” Alexandre De Croo, UNDP Administrator and former Prime Minister of Belgium, was quoted by The Guardian as saying.“You will see a lasting impact, especially in poor countries, where you push people back into poverty. That’s the most heartbreaking element. The people who are being pushed back into poverty are often people who were in poverty before, came out of it and are now being pushed back.”The head of the International Monetary Fund has warned that the “chilling impact” of the conflict has already caused lasting damage to the global economy, even if peace prevails.UNDP called for a global response to support the most affected countries. It recommended targeted and temporary cash transfers to protect vulnerable households, estimating that about $6 billion would be needed to offset the impact for those below the poverty line.De Croo said international agencies and development banks could support such measures. “There is a positive economic benefit to giving short-term cash transfers to keep people from falling back into poverty,” he said. He said temporary subsidies or vouchers for electricity or cooking gas could also help, although the report warned against blanket subsidies as these would favor wealthier households and be difficult to sustain.While rich countries are in a better position to manage the impact, UNDP said developing countries face greater challenges due to limited financial resources and ongoing economic pressures. It also noted cuts in aid spending by Western governments, including the US, Germany, France and Britain, as they deal with rising debt and rising defense spending.
