Seven months into the Middle East crisis, developing countries face compounding pressures: renewed energy price surges following the July ceasefire breakdown, a potentially record El Niño, and global benchmark interest rates at multi-decade highs.

Governments have cushioned energy price increases at substantial fiscal cost, with global explicit fossil fuel subsidies potentially exceeding $1 trillion this year. Yet containment is becoming unsustainable. Across 130 countries, gasoline and diesel prices have risen by averages of 26 and 38 percent since the conflict began, with increases widening in nearly two-thirds of countries between June and September. Higher prices have contributed to protests and unrest.

UNDP estimates that full transmission of the energy and food price shock could push an additional 130 million people below $6.85 a day, 121 million below $3.65, and 66 million below $2.15, overwhelmingly in developing countries. These figures represent potential exposure, not observed poverty increases. Fully compensating households would cost approximately 1.1 percent of developing-country GDP; protecting only those below $6.85 would cost around 0.3 percent. However, fiscal constraints and rising debt service increasingly divert resources from long-term development.

All 26 UNDP country offices surveyed expect the worst is yet to come; 25 anticipate sustained or increased crisis priority, half face pre-existing economic or fiscal stress, and ten are preparing for El Niño.

The policy imperative is increasingly urgent: temporary, targeted support backed by affordable multilateral finance and sustained engagement from international financial institutions and the UN system.