New York, March 31 (SANA) – The United Nations Development Programme (UNDP) warned that the ongoing war between the United States and Israel on one side and Iran on the other could inflict economic losses of $120 billion to $194 billion across the Arab region, equivalent to 3.7% to 6% of total regional GDP.
In a report published Tuesday on the UN website, the agency said the conflict—now entering its fifth week—poses serious risks to economic and social development across Arab countries, with effects extending beyond the immediate conflict zones.
Growth slowdown and rising unemployment
According to the report, the crisis could push unemployment rates up by around four percentage points, resulting in the loss of approximately 3.6 million jobs, a figure exceeding the number of jobs created in the region last year.
The report also highlighted disruptions to maritime routes, particularly the Strait of Hormuz, through which about 20% of global oil and gas supplies pass. The waterway has effectively faced closure amid rising tensions.
Such disruptions could increase trade costs dramatically due to longer shipping routes and higher insurance and transport costs, which would in turn drive up prices for essential goods and energy.
The report warned that these disruptions could also threaten food security and pharmaceutical supply chains, particularly in countries that rely heavily on imports.
Uneven impact across the region
UNDP said Gulf Cooperation Council (GCC) countries could face economic losses ranging between 5.2% and 8.5% of GDP, with up to 3.1 million jobs at risk if the escalation continues.
Meanwhile, countries in the Levant are expected to experience the most severe humanitarian consequences, with 2.8 million to 3.3 million additional people likely to fall into poverty, accounting for more than 75% of the projected regional increase in poverty.
The report warned that Lebanon could face particularly severe pressures, with increasing strain on health and education systems and reduced capacity of relief networks to respond to growing needs.
Development setbacks and financial pressures
UNDP said the crisis could lead to a 0.2% to 0.4% decline in the region’s Human Development Index, equivalent to losing between six months and a full year of development progress.
The report also warned of mounting pressure on regional currencies, which could force central banks to raise interest rates to counter imported inflation, increasing sovereign debt burdens and limiting governments’ ability to finance essential services.
Civil aviation has also been heavily affected due to airspace closures and rerouted flights, raising operating costs and impacting tourism—one of the main sources of income for several Arab economies.
Call for policy reassessment
UNDP said the crisis serves as a “wake-up call” for governments in the region to reassess economic, financial and social policies.
The agency called for stronger regional cooperation, economic diversification beyond traditional resources and improvements in production systems and supply chains to reduce vulnerability to external shocks.
Kh.A
