Millions of people could fall into poverty due to rising energy costs, the impact of an intense El Niño phenomenon, and increases in interest rates, warned the head of the UN development agency.

International oil prices have soared since the United States launched the war against Iran in February, and Tehran retaliated against Washington's allies in the Gulf, affecting oil and gas supplies.

Fiscal deficits and debt-to-GDP ratios have risen worldwide since the 2008 financial crisis, while governments contend with a series of shocks, such as those caused by the pandemic and the wars in Ukraine and the Middle East.

The head of the United Nations Development Programme (UNDP), Alexander de Croo, discussed the issue with AFP on the sidelines of this week's IMF and World Bank meetings in Bangkok.

"You must repair your roof when at the same time your house is burning," he told AFP.

He added that governments of developing countries had no time to build mechanisms to cushion or resolve the problems arising from previous crises and were forced to face new global challenges.

The IMF warned this week that, although economic growth withstood the energy crisis, resilience depends heavily on the boom in artificial intelligence investments, and poor countries without exposure to that technology face difficulties.

IMF Managing Director Kristalina Georgieva warned that "winter is coming"—an allusion to the popular fantasy book series "Game of Thrones," suggesting that a cataclysm is approaching if the world does not prepare for it.

De Croo added that "some countries have a well-protected house with money in the bank. Other countries have a house without a roof and no money in the bank."

"We stagger from one crisis to the next, and what countries need is some space and some time, and access to financing," he said.

Not receiving a response can be devastating. The UNDP warned in a report that some 130 million people are at risk of falling into poverty this year if energy and food price increases continue.

The risk is greater in South and East Asia and sub-Saharan Africa, according to the UNDP.

Difficult to Manage

Advanced economies have seen an increase in bond yields due to forecasts of high inflation and growing indebtedness, which propitiates an increase in interest rates.

De Croo warned that this affects the ability of developing countries to access the capital they need to face economic shocks.

According to the UNDP, the average developing country devotes 9.5% of government revenues to paying interest, the highest level in a quarter century and more than triple that of higher-income countries.

"It becomes a difficult situation to manage, and it takes away all their margin for formulating policies," De Croo said.

The former Belgian prime minister said he would use the Bangkok meeting to promote investment by advanced economies and multilateral agencies in economic growth, resilience, and job creation in the developing world.

He added that recent cuts in international aid are impacting those countries.

The UNDP warned that more difficulties may come due to the El Niño climate phenomenon, which is expected to be the strongest ever recorded.

The phenomenon could cause floods, droughts, and other extreme events, which would peak in early 2027.

De Croo considered that private capital is needed to face the worst consequences of climate change.