As developing countries contend with rising energy prices, costly borrowing and an unusually powerful El Niño, the United Nations Development Programme has warned that governments are running out of room to shield vulnerable households from overlapping economic shocks.
In an analysis released on 11 October 2026, UNDP estimated that about 130 million additional people could have been pushed into poverty this year if increases in energy and food prices had been passed through fully to consumers.
That figure is a conditional scenario, not a count of people already pushed into poverty. Government interventions—including subsidies, price caps and tax relief—have so far cushioned part of the impact.
A costly safety net
UNDP said the cost of keeping fuel affordable is putting growing strain on public budgets. At prevailing energy prices, global fossil-fuel subsidies could exceed $1 trillion this year, according to its analysis.
The report, titled No Time to Recover: Compounding Crises, Depleted Fiscal Buffers and What It Means for Developing Economies, also highlights the pressure of high borrowing costs. Governments facing expensive debt service have less money available for food assistance, health care and other essential programmes.
Meanwhile, El Niño-related threats to harvests and food systems could compound the effects of higher transport and fertiliser costs, particularly in vulnerable regions of Africa and Asia.
Why the warning matters
UNDP’s findings underline a difficult policy trade-off: removing price protections too quickly can harm low-income households, but maintaining broad subsidies indefinitely may strain public finances. The agency has called for international support and financing that helps countries protect vulnerable populations while responding to successive crises.
Source: UNDP press release and analysis, 11 October 2026.