A month of war involving US-Israel and Iran could inflict losses of up to $194 billion on Arab economies and push millions into poverty, the United Nations Development Programme (UNDP) said in a report released on Tuesday.

The UNDP estimated that regional gross domestic product (GDP) could shrink by 3.7 to 6 pe rcent — equivalent to losses between $120 billion and $194 billion — wiping out much of the growth achieved in 2025.

Abdallah Al Dardari, UN assistant secretary-general and director of the UNDP Regional Bureau for Arab States, said the conflict exposes deep structural vulnerabilities in the region’s economies.

“We hope the fighting will stop tomorrow, as every day of delay has negative repercussions on the global economy,” he said.

The report warned that between 3.7 million and 4 million people across the region could fall below the poverty line, while up to 3.7 million jobs may be lost.

The projections are based on a “short but intense” four-week conflict scenario, suggesting the economic toll could rise further if hostilities continue.

The war has disrupted energy flows and heightened risks in key maritime corridors, particularly the Strait of Hormuz, driving volatility in global oil markets. Brent crude prices rose sharply, reflecting tightening supplies and investor concerns.

The UNDP said the economic shock would hit hardest in fragile states, including Sudan and Yemen, as well as parts of the Levant, where existing vulnerabilities amplify the impact of external shocks.

Lebanon is expected to face severe consequences after being drawn into the conflict, with ongoing air strikes and displacement compounding pressure on infrastructure, public services, and the economy.

The report also warned of a sharp economic contraction in Iran, with real GDP growth projected to decline by up to 10.4 percentage points compared to a no-war scenario. Poverty levels in Iran could rise significantly, affecting millions more.

The UNDP cautioned that continued escalation risks deepening economic distress across the Middle East, with spillover effects on global trade, inflation, and supply chains.