Amman: Assistant Secretary-General and Director of the Regional Bureau for Arab States at the United Nations Development Program (UNDP) Abdallah Al Dardari warned Tuesday of significant economic and social repercussions stemming from the ongoing military escalation in the Middle East, with substantial losses projected across the Arab region.
According to Jordan News Agency, Al Dardari, speaking at a press conference in Amman to present a recent assessment by the UNDP, stated that regional economies could contract by between 3.7 and 6.0 percent of their combined Gross Domestic Product (GDP), equivalent to losses ranging from $120 billion to $194 billion, exceeding total growth recorded in 2025.
He explained that the labor market is expected to face considerable strain, with unemployment projected to rise by around four percentage points, resulting in the loss of approximately 3.6 million jobs. Additionally, up to 4 million more people could fall below the poverty line.
Al Dardari emphasized that the report, titled "Military Escalation in the Middle East: Economic and Social Repercussions for the Arab Region," highlights structural vulnerabilities in Arab economies, making them susceptible to short-term shocks and external disruptions.
He stressed the importance of a strategic reassessment of fiscal, sectoral, and social policies, referring to the current developments as a critical juncture in the region's development trajectory.
He suggested that strengthening regional economic integration, diversifying away from hydrocarbon dependence, expanding productive capacity, enhancing supply chain resilience, and broadening trade partnerships are essential to mitigating exposure to future shocks.
The assessment is based on a computable general equilibrium model simulating the impact of a four-week escalation under multiple scenarios, ranging from moderate trade disruptions to severe shocks affecting energy markets.
The findings indicate uneven impacts across the region, with the Gulf Cooperation Council countries and the Levant expected to bear the most significant losses due to their exposure to trade and energy market volatility, with projected GDP contractions ranging between 5.2 and 8.7 percent.
Al Dardari noted that poverty levels are expected to rise most sharply in the Levant and least developed Arab countries, with an estimated 2.85 million to 3.30 million additional people falling into poverty in the Levant alone, accounting for more than 75 percent of the total regional increase.
He also mentioned that the Human Development Index is projected to decline by between 0.2 and 0.4 percent, translating into the loss of approximately six months to one year of development progress across the region.