Developing nations face triple shock from energy crisis, El Niño and borrowing costs, UN warns

The United Nations Development Programme (UNDP) has warned that developing nations are facing a "triple shock" from the energy crisis, El Niño, and surging borrowing costs, which could push tens to hundreds of millions of people back into poverty. Speaking ahead of the International Monetary Fund (IMF) and World Bank annual meetings in Bangkok, UNDP administrator Alexander De Croo called for "solidarity and global action" to support affected countries.

The report, "No Time to Recover," highlights the risks of the compounding crises of energy, climate, and debt. Oil prices have risen above $100 a barrel since conflicts resumed in the Middle East. While emergency government measures have shielded up to 130 million of the world's poorest people from the full impact of high prices, many are now at risk as governments exhaust their fiscal resources.

The UNDP warns that the worst El Niño climate pattern in perhaps 1,000 years could cause widespread crop failures and increase the risk of extreme weather events. Simultaneously, the global bond sell-off is driving up government borrowing costs. Currently, the cost of bond financing for developing countries is 9%, considered "really, really high." This trend is expected to worsen between now and the spring.

De Croo noted that none of the three crises currently show any signs of relief. He urged the international community to step up access to affordable finance for developing countries to support vulnerable households. While the UNDP does not oppose efforts to secure debt relief for the hardest-hit countries, De Croo emphasized the need for more urgent action and a coordinated policy for developing nations that provides "time and space" for necessary changes.