War could wipe up to $194 billion from Arab economies, UNDP warns
March 31, 2026 03:08 pm
A new United Nations Development Programme assessment is warning of sweeping economic fallout across the Middle East from the ongoing Iran war, with the GDP of regional Arab countries projected to shrink by as much as 6%.
The report estimates losses of between $120 billion and $194 billion, driven by disruptions to energy flows, trade routes and financial markets rippling far beyond the battlefield.
“The escalation is transforming a localized conflict into a systemic regional shock,” the UNDP said, pointing to collapsing shipping volumes, rising insurance costs, and volatile oil prices hitting interconnected economies.
The impact is uneven but severe. Gulf economies and countries in the Levant are expected to bear the brunt, with output in some cases falling more than 8%. Investment and trade are also sharply contracting, while inflation and borrowing costs rise.
Across the region, nearly 4 million people could be pushed into poverty, as higher food and energy prices erode household incomes.
Meanwhile, Iran faces an even steeper downturn. UNDP estimates suggest its economy could contract by up to 10%, with millions more falling into poverty as conflict disrupts energy infrastructure and trade.
Source: CNN
-- Agencies
