New Delhi, Apr 8: The US and Israeli war against Iran could wipe out nearly USD 200 billion worth of economic growth across West Asia, a new United Nations study found.
The military escalation in West Asia is likely to cost economies of the region from 3.7 to 6 percent of their collective Gross Domestic Product(GDP), a staggering loss of 194 billion dollars.
Coupled with an estimated rise in unemployment and a loss of over 3.6 million jobs.
These reversals will push around 4 million people into poverty, reports said.
This is in addition to 600 million dollar per day losses incurred by various Arab airlines and tourism related businesses.
Arab airlines lost millions due to cancellations of flights, closed airspace and reduced visitors’ confidence.
Major hubs like Dubai, Riyadh, and Doha experienced flight disruptions, with hotel occupancy impacted,leading to huge revenue loss.
The UN agency studied a number of different scenarios to determine how the conflict, which began on February 28, might affect countries in the region.
The report indicated that the damage could be profound.
“A short-lived military escalation in the Middle East could generate profound and widespread socio-economic impacts across the Arab States region,” it said.
The overall loss could result in the regional unemployment rate rising by as much as four percentage points, costing some 3.6 million jobs and pushing as many as four million people into poverty, the report says.
“This crisis rings alarm bells for countries of the region,”Abdullah Al Dardari, the UN Assistant Secretary General of the UNDP Arab said in a statement.
The hardest-hit regions would be concentrated in Gulf Cooperation Council countries and in the Levant, with each region set to lose more than 5.2 percent of their GDP.
The likes of Qatar, Kuwait, Saudi Arabia, and the United Arab Emirates are suffering from the effective closure of the Strait of Hormuz, which is preventing them from exporting much of their oil and natural gas.
Qatar and Kuwait could each see their GDP contract by 14 percent this year should the conflict continue through to the end of April, Goldman Sachs Group Inc. estimates.
That would be the worst economic slump for those two countries since the early 1990s, when Iraq’s invasion of Kuwait triggered the Gulf War.
Saudi Arabia and the UAE would fare better given their ability to re-route some oil flows away from the Hormuz waterway.
But they would still likely see GDP drop by about 3 percent and 5 percent, in what would be the biggest economic hit since the COVID-19 pandemic in 2020.
The conflict, now in its second month, has already sent global energy prices soaring, unnerving the global economy.
The closure of the Strait of Hormuz was raising food and fertilizer prices in a way that could hit poorer countries particularly hard.
Meanwhile, a separate analysis from UNDP found the war will trigger a sharp economic contraction in Iran, slashing GDP by as much as 10.4 percent and potentially pushing more than 3.5 million people into poverty.
The report said airstrikes on Iran have “damaged homes, schools, health facilities, and essential services.”
