UN development chief warns millions could be pushed into poverty by the energy shock

People at risk of poverty this year

130 million

About 130 million people are at risk of falling into poverty this year if energy and food price increases are fully passed on without subsidies, the UN Development Programme (UNDP) warned in a new report.

Three shocks at once

• Surging energy costs
• An El Niño forecast to be the strongest
• Higher interest rates

Fuel prices have soared since the United States launched its war on Iran in late February. UNDP head Alexander De Croo also points to an intense El Niño and higher interest rates.

Government revenue spent on interest

9.5 %

The median developing country now spends about 9.5 per cent of government revenue on interest, the highest in a quarter of a century and more than three times the share in high-income countries.

"You have to repair your roof while at the same time your home is on fire," De Croo said at the IMF and World Bank meetings in Bangkok.

— Alexander De Croo, UNDP head

Global agricultural prices rose 13 per cent in the third quarter, said Alvaro Lario, president of the International Fund for Agricultural Development, who expects food inflation to hit the poorest within six to nine months.