Middle East war risks pushing millions into poverty, says UNDP

Economic fallout could cost around 3.6 million jobs across the region

FILE PHOTO: Smoke rises in Sharjah, following reports of Iranian attacks after United States and Israel strikes on Iran, in Sharjah, United Arab Emirates, Mar 1, 2026. REUTERS/Amr Alfiky/File Photo

The ongoing military escalation in the Middle East has pushed the region towards a sharp rise in poverty, with up to 4 million people set to fall below the poverty line, according to new estimates by the United Nations Development Programme (UNDP).

The assessment, titled “Military Escalation in the Middle East: Economic and Social Implications for the Arab States Region”, highlighted how the conflict -- now in its fifth week -- could shrink regional economies by 3.7 to 6.0 percent of their combined GDP, translating into losses of $120 billion to $194 billion.

It said the shock could also raise unemployment by up to 4 percentage points, wiping out around 3.6 million jobs -- more than the total jobs created in 2025.

Poverty increases are expected to be concentrated in the Levant and the Least Developed Arab Countries, where baseline vulnerabilities are highest.

UN Assistant Secretary-General Abdallah Al Dardari warned that even short-lived military escalations can have lasting socio-economic consequences, affecting livelihoods, human development, and regional stability.

He highlighted that structural weaknesses, including dependence on hydrocarbon-driven growth, amplify the impact on communities.

In the Levant, poverty is expected to rise by 5 percent, pushing an additional 2.85–3.3 million people below the poverty line -- accounting for more than three-quarters of the regional increase.

Across the Gulf Cooperation Council, GDP losses are projected at 5.2–8.5 percent, while the Levant may lose 5.2–8.7 percent, reflecting strong exposure to trade disruptions and energy volatility.

Human development, measured through the Human Development Index (HDI), is projected to decline by 0.2–0.4 percent, potentially reversing nearly a year of progress.

The UNDP assessment emphasises the need for stronger regional cooperation, economic diversification, and investment in trade and production systems to reduce exposure to conflicts and shocks, while also promoting policies that sustain long-term employment and growth.