A significant proportion of the population in the Islamic Republic of Iran could be pushed into poverty as daily life and local economic activity are disrupted, according to a preliminary human development impact brief by the United Nations Development Programme (UNDP).
These shocks threaten to reverse Iran’s socioeconomic and poverty reduction gains. According to the analysis, Iran’s Human Development Index (HDI), estimated at 0.799 in 2023, could decline by 0.47 to 0.56 percentage points. This is equivalent to one to one and a half years of lost human development progress.
“Each day the crisis continues adds pressures on people’s current livelihoods and their futures,” said Beate Trankmann, UNDP Deputy Regional Director for Asia and the Pacific. “Rapidly stabilising the situation and ensuring continuity of jobs and basic services will be critical to prevent today’s shocks from evolving into long-term human development setbacks.”
Despite government efforts to protect vulnerable households through food subsidies and cash transfers, food inflation remains high. Low-income households spend around 45 per cent of their income on food, leaving them particularly exposed to further price increases and import disruptions in the current context.
This preliminary analysis, part of a series of UNDP Briefs examining the human development impact of conflict escalation, is based on available data and information with scenario simulations assuming a temporary 28-day disruption. The analysis underscores the urgent need to safeguard civilian infrastructure critical to people’s basic well-being.
Damage to education and health facilities, water and electricity systems, connectivity and local markets is already affecting households’ ability to access basic services and sustain daily livelihoods. This is particularly so for daily wage earners and informal sector workers. The continued disruption to small and medium-sized enterprises will have cascading impacts on household incomes that millions rely on.
The UNDP Brief underscores that any sustainable solution to these human development ‘breaks’ requires an end to the conflict. In the meantime, humanitarian assistance, targeted social protection, and rapid recovery support are essential to prevent longer-term poverty, protect essential services, and sustain local economic activity.
UNDP will initiate support to early recovery activities, including the restoration of community electricity and water services, alongside support for micro and small enterprises and livelihoods recovery in economically vulnerable communities.
“Experience from around the world shows how fast instability can undo years of human development gains” said Kanni Wignaraja, UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific. “While the situation continues to evolve, the human cost of these shocks is already being felt, so protecting the most vulnerable households in their efforts to navigate this period of economic uncertainty will be essential.”
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