New UNDP assessment links Asia-Pacific’s reliance on imported energy and critical supply chains to rising pressure on households, small businesses, and public budgets, with 8.8 million people at risk of falling into poverty.

Ha Noi, 14 April 2026 – Years of human development gains across Asia and the Pacific are under pressure as the impacts of the recent military escalation in the Middle East ripple through economies and households, despite a temporary ceasefire.

As the situation remains fluid, a current preliminary analysis by UNDP examines how heightened volatility, transmitted through energy, trade, and labour markets, is straining incomes, consumption, jobs and social protection across the region. Low-income households, informal workers, migrants, and small enterprises are among the most at risk. Women are the most vulnerable across these categories.

The report, “Military Escalation in the Middle East: Human Development Impact Across Asia and the Pacific,” synthesizes impact and needs assessments covering 36 countries, complemented by macroeconomic simulations, and provides a regionwide outlook as well as how different countries are currently responding to these pressures.

Rising fuel and freight costs are the most immediate pressure point.  With over 80 percent of crude and LNG transiting the Strait of Hormuz destined for Asian markets, the region is experiencing rapid pass through of higher pricing on transport, electricity, food and fertilizer. For an export-oriented economy like Viet Nam, these fluctuations in global shipping and energy costs present a direct challenge to maintaining stable growth and protecting the purchasing power of citizens.

The report estimates that 8.8 million people across the region are at risk of falling into poverty. Output losses could range from US$97 billion to US$299 billion, equivalent to between 0.3 and 0.8 percent of regional GDP. 

Governments across the region, including Viet Nam, have responded rapidly to cushion the domestic shocks through fuel price stabilization, targeted subsidies, and early adaptive measures such as diversifying energy supply and improving energy efficiency. 

“UNDP welcomes Viet Nam timely response through emergency fiscal measures and pricing support to stabilize the economy,” said Ramla Khalidi, UNDP Resident Representative in Viet Nam. “At the same time, we remain mindful of international experience that shows that prolonged fossil fuel support measures risk reversing the country’s energy transition goals. Accelerating the just energy transition is essential for Viet Nam long-term energy security and to build resilience against global shocks”.

In other countries, human development losses under a short‑duration scenario range from weeks to months of foregone development progress. While Southeast Asia experiences comparatively smaller setbacks than South Asia, the report warns that disruptions could escalate significantly if they persist.

“The strain this war is placing across Asia-Pacific is already visible. It is reaching households faster than policy can adjust,” said Kanni Wignaraja, UN Assistant Secretary‑General and UNDP Regional Director for Asia and the Pacific.  “The resulting prolonged volatility in global markets is imposing increasingly difficult tradeoffs between stabilizing prices, supporting vulnerable households, and maintaining essential public services and market investments. At the same time, we see important opportunities for countries to accelerate long‑term resilience through adaptive social protection, stronger local and regional value chains, and diversified energy and food systems.” 

The report is part of a series of socio-economic analyses produced by UNDP to support policymakers unpack the human development consequences of the current conflict,  and identify options for a development response as a first line of defense./.

LINK TO REPORT: https://www.undp.org/asia-pacific/publications/military-escalation-middle-east-human-development-impacts-across-asia-and-pacific

Media contacts: 

Raul de Mora Jimenez – raul.de.mora@undp.org; +1 631 464 8617

Aminath Mihdha - aminath.mihdha@undp.org