The ongoing war involving the United States and Israel against Iran raises a critical question: what will be the economic result of this conflict for the Middle East? The answer indicates a potential economic setback of up to $200 billion for Arab nations.

According to a recent report by the United Nations Development Programme (UNDP), the GDP in the region is estimated to decline by approximately 3.7-6%. This decline translates to an economic contraction of roughly $120-194 billion in constant 2015 USD.

The ramifications of this conflict extend beyond mere numbers. The regional unemployment rate could rise by as much as four percentage points, resulting in the loss of approximately 3.6 million jobs. Additionally, up to 4 million people could be pushed into poverty due to the economic downturn.

Particularly hard hit will be the Gulf Cooperation Council (GCC) countries and the Levant, with each region projected to lose more than 5.2% of its GDP. This significant economic impact is compounded by the effective closure of the Strait of Hormuz, which has contributed to rising food and fertilizer prices.

Abdallah Al Dardari, a prominent figure in the region, noted, “The situation is a crisis that was raising alarm bells for countries in the region.” The ongoing conflict has already driven up global energy prices, further straining the global economy.

As the situation continues to evolve, the full extent of the economic consequences remains to be seen. Details remain unconfirmed regarding the long-term effects and potential recovery strategies for affected nations.