Poverty could hit 130m if prices passed on, UNDP says

The UN Development Programme warned that about 130 million people could be pushed into poverty this year if higher energy and food prices are fully passed on without subsidies.

UNDP head Alexander de Croo said many developing countries had used broad subsidies to respond to the current energy price spike, but repeated crises had left them with limited resources to keep doing so.

Speaking on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, de Croo said governments in the developing world had not had time to rebuild financial buffers before facing new shocks.

Global fuel prices have risen since the United States launched its war on Iran in late February, with Tehran's retaliations against Washington's Gulf allies curtailing major oil and natural gas supplies.

UNDP said people in South and East Asia and sub-Saharan Africa are at particular risk. It also said the median developing country now spends about 9.5 percent of government revenue on interest payments, the highest level in 25 years and more than three times the level in high-income countries.

De Croo said higher borrowing costs were reducing developing countries' room to respond to shocks and increasing debt payments. He said he would use the Bangkok meetings to press advanced economies and multilateral agencies to invest in growth, resilience and job creation in the developing world.

UNDP also warned of further pressure from this year's El Nino climate phenomenon, forecast to be the strongest on record, with effects including flooding, droughts and other extreme events estimated to peak in early 2027.