2026年5月就业与社会趋势报告：中东危机加剧的劳动力市场风险 Employment and Social Trends May 2026 Update

bILObrief

>EmploymentandSocialTrends:May2026Update

GrowinglabourmarketrisksoftheMiddleEastcrisis

Keymessages

Global

>TheMiddleEastcrisishasquicklyevolvedintoa

globalshocktotheworldofwork.Itseffectsare

spreadingthroughhigherenergypricesand

disruptionstotransportroutes,supplychains,tourism,investmentconfidence,migrationflowsand

remittances.

>Globallabourmarketimpactstaketimeto

materialize,buttherisksarealreadysignificantifoilpricesremainhigh.Underascenarioinwhichoilpricesclimbbyabout50percentabovetheirJanuary–

February2026average,estimatessuggestthat:

●Hoursworkedcouldfallby0.5percentin2026and

1.1percentin2027,equivalentto14millionand38millionfull-timejobs.

●Reallabourincomecoulddeclineby1.1percentand3percent,equivalenttolossesofaround

US$1.1trillionandUS$3trillion.

●Theunemploymentratecouldriseby0.1

percentagepointsin2026andby0.5pointsin2027,equivalenttoanadditional5millionunemployed

peoplein2026and20millionin2027.

>Theshockisuneven.Exposureishighestwhere

economies,sectorsandworkersaremostclosely

linkedtoGulfenergyflowsandenergy-intensive

supplychains.TheArabStatesandAsiaandthePacificstandoutasthemostexposedregions.

>Policyresponseshavebegunbutremainunevenandconstrainedbylimitedfiscalspace.Astrongerfocusonjobs,incomesandbusinessresilienceis

neededtopreventatemporaryenergyshockfrombecomingalonger-lastingsetbackfordecentwork.

ArabStates

>LabourmarketrisksintheArabStatesare

immediateandsizeable.Basedonamodeldesignedtocapturethefasterandbroaderimpactofwarintheregion,simulationsindicatethathoursworkedcouldfallby1.3percentunderrapidde-escalation,3.7percentunderaprotractedcrisisand10.2percentundersevereescalation.

>Thesevereescalationscenariowouldimplyashocktohoursworkedmorethantwicethescaleofthe

impactduringtheCOVID-19pandemic.Duringthe

pandemic,hoursworkedintheArabStatesdeclinedby4.4percentin2020.

>Around40percentofemploymentintheArabStatesisinhigh-exposuresectors.Theseincludetrade,construction,manufacturing,agriculture,

transport,andaccommodationandfoodservices.

AsiaandthePacific

>SpilloverstoAsiaandthePacificarealreadyvisibleandmayworsenovertime.Undertheoil-shock

scenario,estimatessuggestthathoursworkedinthe

regioncoulddeclineby0.7percentin2026and1.5percentin2027,whilereallabourincomecouldfallby1.5percentand4.3percent.

>Around22percentofworkersareinhigh-exposuresectors.Agriculture,transport,manufacturingand

constructionfacerisks,whiletourism-dependenteconomiesareundergrowingpressure.

>EmploymentandSocialTrends:May2026Update2GrowinglabourmarketrisksoftheMiddleEastcrisis

Migrationandremittances

>Migrantworkersarelikelytoabsorba

disproportionateshareoftheadjustment.InGulf

CooperationCouncil(GCC)countries,ILOestimatesthatforevery1percentdeclineinemploymentamong

nationalsintimesofcrisis,employmentamongnon-nationalsfallsby4percent.

>LabourmigrationisamajortransmissionchannelinAsiaandthePacific.Earlyevidenceshows

exceptionallysharpdeclinesinmigrantworker

outflowstoGCCcountriesandrisingrepatriations,whileremittancesarebeginningtoshowsignsofdownwardpressure.

>Introduction:Gathering

cloudsoverglobal

employmentandtheworldofwork

ThisEmploymentandSocialTrendsMay2026Updateexaminesemergingriskstojobs,incomesandworkersinaperiodofheightenedglobaluncertainty.Asin

previousupdates,itfocusesonhowchangesinthe

geopoliticalandeconomicenvironmentcansignificantlyaffectlabourmarketsandsocialoutcomes.ThisUpdategivesparticularattentiontothepotentialimpactoftheMiddleEastcrisis.

TheMiddleEastcrisisisoneofthemajorsourcesof

downsideriskfortheworldofworkin2026.Beyonditsimmediatehumantoll,thecrisishasdisruptedenergy

markets,transportroutes,supplychains,tourismandinvestmentconfidence,witheffectsthatextendwell

beyondthedirectlyaffectedcountries.Thesepressuresareunfoldingatatimewhentheglobaleconomywasalreadymarkedbyweakgrowthprospects,elevated

uncertaintyandpersistentdecentworkdeficits.

Theworldofworkisoneofthemainchannelsthroughwhichtheseshocksaffectpeople’slives.Whenenergypricesrise,transportcostsincrease,tourismweakensandsupplychainsaredisrupted,workersandenterprisesareaffectedthroughlowerdemand,higheroperatingcosts,

reducedworkinghours,pressureonreallabourincomesand,insomecases,joblosses.Theseeffectsarelikelytobeuneven,withgreaterrisksforworkersandenterprisesinmoreexposedsectorsandforthosewithlimited

protection.

WhilethisUpdateprovidestheILO’sinitialassessmentofthelabourmarketimplications,itisnotintendedtopredictthefuturecourseofthecrisis.Rather,itassesses

themaintransmissionchannels,estimatespossible

impactswheredataallow,andhighlightswhereriskstojobs,incomesandenterprisesmaybegreatest.The

analysiswillbeupdatedasthesituationevolvesandasmoreevidencebecomesavailable.

Thereportidentifiestheglobalimpactwithan

additionalfocusontheArabStatesandAsiaandthe

Pacific.Whiletheeffectsofthecrisisareglobal,themostimmediateimpactisonthesetworegions.TheArab

Statesarethemostdirectlyaffected,throughconflict-

relateddisruption,damagetoeconomicactivity,forced

displacement,energyandtradeshocks,andpressuresonmigrantworkers.AsiaandthePacificisalsohighly

exposed,asspillovereffectsarealreadyvisiblethrough

energyimportdependence,transportandlogistics

disruptions,tourism,labourmigrationandremittance

linkswithGulfeconomies.Thelabourmarketimpactsin

theIslamicRepublicofIranarenotexplicitlyassessedduetothelackofrelevantdata(includinghighfrequencydata)(seeBox1).

TheUpdateisorganizedinfourparts.Thefirstpart

providesaglobaloverview,examininghowthecrisisis

likelytoaffectlabourmarketsthroughoil-priceshocks

andsupply-chainexposure,withestimatesforhours

worked,reallabourincomeandunemployment.The

secondpartfocusesontheArabStates,wherelabour

marketconsequencesarelikelytobemostimmediateanddirect.ThethirdpartfocusesonAsiaandthePacific,

wherespillovereffectsarealreadyvisibleandmay

intensifyifdisruptionpersists,whilethefinalpartprovidesabriefoutlineoftheoverallpolicyresponseandoutlook.

>I.Globaloverview:Impactbeyondtheconflictzone

Thecrisiscouldfurtherweakenanalreadyfragileglobaleconomy.EvenbeforetheMiddleEastcrisis,

>EmploymentandSocialTrends:May2026Update3GrowinglabourmarketrisksoftheMiddleEastcrisis

globalgrowthwassubdued,uncertaintywaselevated,

andmanycountrieswerefacingconstrainedfiscalspaceandpersistentinflationarypressures.Thecrisishasaddedanewlayerofriskthroughhigherenergyprices,

disruptedtransportroutes,supply-chainpressuresandweakerinvestorconfidence.

RecentIMFscenarioanalysispointstoadeteriorationintheglobaloutlook.Underitsbaselineassessment

1

,

globalGDPgrowthisreviseddownbyaround0.3

percentagepoints,whileinflationisrevisedupby

approximately0.5pointscomparedwithpre-crisis

projections.Inamoreseverescenario,whichassumes

moredamagetoenergyinfrastructureintheconflict

region,theimpactcouldbemuchlarger,withglobal

growthreviseddownbyaround1.3percentagepointsandinflationrevisedupbyaround1.9points.Thesescenariosunderscorethatthecrisisisnotonlyaregionalshock,butalsoapotentialsourceofwidermacroeconomic

instability.

Assessingthegloballabourmarketimpactismore

complex.Directeffects,suchasthedestructionof

workplaces,displacementofworkers,disruptionof

enterprisesandimmediateincomelosses,aremostvisibleintheMiddleEast.Atthegloballevel,themainconcernishowthecrisisspreadsindirectlythroughenergyprices,

inflation,productioncosts,tradeandinvestment.Thesetransmissionchannelstaketimetoworkthroughthe

economy,whichmeansthatlabourmarketimpactsarelikelytoappearwithadelay.

Thesespillovereffectscanstillbesignificantfor

enterprisesandworkers.Higherenergypricesincreaseproductionandtransportcosts,reducehousehold

purchasingpowerandputpressureonrealwagesand

weakenenterpriserevenues,alongwithnegatively

impactingenterpriserevenue.Weakerdemandand

heighteneduncertaintycandelayinvestmentandhiring.Overtime,thesepressurescantranslateintoreduced

workinghours,lowerreallabourincomesand,eventually,higherunemployment.

Theglobalanalysisthereforefocusesontheenergy-priceshockanditslabourmarkettransmission.Itfirst

1SeeIMF.2026.

WorldEconomicOutlook,April2026:Global

EconomyintheShadowofWar.

2Thisisdifferentfromthepersistenceoftheshock’seffects.Thelattereffects,spreadoverthisyearandnext,areduetothe

stronglaggedcomponents.

estimatespossibleimpactsonthreekeyindicators–hoursworked,reallabourincomeandunemployment–and

thenexamineshowexposurediffersacrossregions,sectorsandgroupsofworkers.

Impactonhoursworked,incomeandunemployment

Estimatesbasedoneconometricmodellingofanoilshocktracehowitaffectslabourmarketsovertime.Thecurrentsimulationassumesanoilpriceincrease

equivalenttoapproximately50percentabovethe

January–February2026averagespreadthroughout

March-Mayofthisyear

.2

Asoilpriceshavebeenhighlyvolatile,theresultsshouldbereadasascenario-basedestimateratherthanaforecast

.3

Thelabourmarketimpactofanoilshockdoesnot

materialiseallatonce.Theshockistransmittedthroughhigherenergypricesandloweroilsupply,whichraise

productionandtransportcosts,addtoinflationand

weakenactivityacrossabroadrangeofsectors.As

purchasingpowerdeclinesanduncertaintyrises,firms

maypostponeinvestmentandhouseholdsmayreduce

spending.Monetarypolicytighteningaimedatcontaininginflationcanfurtherreinforcetheseeffects.Asthese

pressuresworkthroughtheeconomy,labourmarket

impactsbecomemorevisiblethroughlowerworking

hours,weakerreallabourincomesand,eventually,higherunemployment.Thistimelagisreflectedinthesimulationresults.

Globalhoursworkedandreallabourincomesareestimatedtodeclinegraduallybutsignificantly.

Comparedwitha“no-conflict”scenario,whichassumes

thattheoilshockdoesnotoccur,thesimulationsuggeststhathoursworkedcouldbelowerbyapproximately0.5

percentin2026and1.1percentin2027.Thiswouldbeequivalenttoagloballossofabout14millionfull-time

equivalentjobsin2026,and38millionin2027,whilereallabourincomecouldalsodeclineby1.1percentin2026and3percentin2027(Figure1),correspondingtolosses

3Theseestimatesaresubjecttoahighdegreeofuncertainty,

reflectingtheuncertainpathoftheconflict.Thefinalsizeof

theimpacthingesstronglyontheeventualsizeoftheoilshockanditsdegreeofpersistence.Seethe

TechnicalNote

for

furtherdetailsonthedurationandsizeoftheoilshockusedforthesimulation.

>EmploymentandSocialTrends:May2026Update4GrowinglabourmarketrisksoftheMiddleEastcrisis

ofaroundUSD1.1trillionandUSD3trillion,respectively,in2021PPPterms.

Increasesintheunemploymentrateareexpectedtobuildmoreslowly,butcouldbecomesignificantin

2027.Beforethecrisis,theEmploymentandSocialTrends2026(January2026)projectedtheglobalunemployment

ratetoremainstableat4.9percentin2026andtodeclineslightlyin2027.Undertheoil-shockscenario,the

unemploymentratewouldnowriseby0.1percentage

pointsin2026andby0.5pointsin2027(Figure1),

equivalenttoanadditional5millionunemployedpeoplein2026and20millionin2027.Hence,ifthecrisisisnotresolvedandtheshockprovesasdurableashistorical

experienceofotheroilshockssuggests,theresilienceofthegloballabourmarketwouldbeseverelytested.

>Figure1.Simulatedgloballabourmarketimpacts,2026and2027

-0.5Hours(percentage)

Reallabourincome(percentage)

unemploymentrate(percentagepoints)

-1.1

-1.1-3.0

0.1

0.5

20262027

Source:Forfurtherdetailsonmodelandsimulation,see

TechnicalNote.

Unevenexposure:regions,sectorsandworkersathigherrisk

Theshockdoesnotaffectallcountries,sectors,

enterprisesorworkersinthesameway.Whilethe

aggregateestimatesshowthepossiblescaleandtimingof

4Lessdiversifiedeconomiesthatdependheavilyonexposedsectorsarelikelytobemorestronglyaffected.

5Furtherdetailsareprovidedinthe

TechnicalNote

.

6Exposureisestablishedforeachsectorineverycountry

individuallyasafunctionofitssupplylinkageswithoil,gasandderivedproductsfacingdisruptionsduetotheconflict,plus

tourism-relatedexposure.Workersinsectorsandcountries

thegloballabourmarketimpact,exposuredependson

howstronglyeconomiesandsectorsrelyonoilandgas,

howdeeplytheyarelinkedtoenergy-intensivesupply

chains,andwhereworkersareconcentrated

.4

Toidentifyworkerexposure,theanalysislooksatthedependenceofcountriesandsectorsonoil,gasandfertilizersingeneral,andfromtheGulfspecifically,bothdirectlyandthrough

supplychains

.5

Inaddition,workersinsectorsthatdependheavilyoninternationaltourismalsofacehigherexposureduetomoreexpensiveandpartiallydisrupted

internationalflights.

Exposuretosupplydisruptionsishighestinregions

mostcloselyconnectedtoGulfenergyflowsand

energy-intensivesupplychains.

6

Attheregionallevel,theArabStatesandAsiaandthePacificstandout.Around40percentofemploymentintheArabStatesand22percentinAsiaandthePacificfallsintothehigh-exposure

category,withanadditional23percentand62percentofemployedfacingmediumexposure,respectively.This

comparestoaround15percentofglobalemploymentinthehigh-exposurecategoryand51percentfacing

mediumexposure(Figure2a).Bycontrast,highexposureislessprevalentinAfrica,theAmericas,andEuropeandCentralAsia.Thisdoesnotmeanthattheseregionsare

unaffected,butthattheiremploymentislessdirectlylinkedtothespecificenergyshockcapturedinthis

analysis.

Transportservicesisthemostexposedsectorglobally.

Around52percentofemploymentintransportservicesfallsintothehigh-exposurecategory,reflectingthe

sector’sdirectrelianceonfuelanditscentralroleintradeandmobility(Figure2b).Manufacturingalsoshows

significantexposure,witharound23percentof

employmentinhigh-exposureactivitiesandanother56percentinmediumexposureactivities,alsoreflectingitsrelianceonenergyandenergy-intensiveinputs.Atleasttwo-thirdsofworkersgloballyemployedinagriculture,

wholesaleandretailtrade,accommodationandfood

servicesfaceatleastmediumexposureprofiles,while

otherservices,includingmanypublicandsocialservices,

facinglowexposureareunlikelytoseetheirjobbeingimpactedthroughsupplydisruptionsorrisinginputcost.Workersfacingmediumorhighexposurehaveahigherriskofseeingsome

changeintheiremploymentduetosupplychannels.However,allworkerscouldbeimpactedbyinflationandsecond-roundmacroeconomiceffects.

>EmploymentandSocialTrends:May2026Update5GrowinglabourmarketrisksoftheMiddleEastcrisis

arerelativelylessexposed.However,theseglobalresultsmasksubstantialdivergencebetweenandwithinregions,ashighlightedbelow.

Somegroupsofworkersaremoreexposedthan

others.Informalworkersareoverallmoreexposedthanformalworkers,reflectingtheirconcentrationinmore

energy-intensivesectors(Figure2c).Low-andmedium-

skilledworkersaremorelikelytobeinhigherexposure

categoriescomparedtohigh-skilledworkers.Atthesametime,mentendtobeinmoreexposedemploymentthanwomen.Thesedifferencesmatterevenmorewhenhigherexposureoverlapswithlowerincomesecurity,weaker

accesstosocialprotectionandotherconstraintstoadjustinginresponsetosuchashock.

Figure2.Distributionofemploymentbyexposuretoshock(percentage)

a)Byregion

Lowexposure

MediumexposureHighexposure

world

Africa

Americas

ArabStates

Asiaandthepacific

EuropeandCentralAsia

345115

176222

7027

372340

5639

4848

Source:Authors’calculationsbasedonOECDandADBinput-outputtablesandILOestimates;see

TechnicalNote

forfurtherdetails.

b)Bysector

Lowexposure

Mediumexposure

Highexposure

Agriculture

Manufacturing

Construction

wholesaleandretail

trade,accomodationand

food

Transportserices

Otherserices

334918

215623

1286

226315

183152

6337

Source:SeeFigure2a.

c)Bytypeofworker

Lowexposureexposure

Mediumexposure

High

women

39

50

11

Men

31

52

17

youth

39

49

12

Adults

34

51

15

Low_andmedium_skilled

31

53

17

High_skilled

49

44

Ⅰnformal

34

49

17

Formal

35

54

11

Source:SeeFigure2a.

>EmploymentandSocialTrends:May2026Update6GrowinglabourmarketrisksoftheMiddleEastcrisis

>Box1.EffectsofthecrisisinIran

WhileitisnotpossibletocarryoutafullassessmentoftheimpactontheIranianlabourmarketasnotedabove,data

andassessmentsfromothersourcesprovidesomeinsightsintothesituationinthecountry.BasedonIMFestimates

fromApril2026

7,

therealGDPoftheIslamicRepublicofIranisexpectedtoshrinkby6.1percentin2026,reflectingtheeffectsofdisruptiontotransitofgoodsandinfrastructuredamage(adownwardrevisionby7.2percentagepoints,

relativetoJanuary2026).

Atthesametime,inflationestimateshavebeenrevisedupwardsbyover13percentagepoints(reaching68.9percentin2026),whichwillfurthereroderealwagesandhouseholdincomesintheIslamicRepublicofIran.Accordingtothe

UNDP

8,

humandevelopmentisprojectedtohavefallenbyoneandahalfyearsintheIslamicRepublicofIranduringthefirstmonthofconflict.Giventhepre-crisisvulnerabilities,theconflictiscreatingfurtherchallengesforworkersand

businesses.

Inresponse,theGovernmenthasannouncedaseriesofshort-termsocialprotectionmeasures,suchascontinuingthepaymentofsocialsecuritybenefitsandservices;expandingsocialassistancebenefits(bothcashandin-kind);andtheintroducingspecialcreditsforhouseholdsandsmallfirms

.9

>II.TheArabStates:

Immediateanddirectimpact

TheArabStatesregion

10

hasbeenheavilyaffectedbytheongoingcrisis.Althoughaceasefiretookeffecton8April2026,uncertaintyremainshigh,withcontinuing

disruptionaroundtheStraitofHormuz,restrictionsonairspaceandtraderoutes,anddirectdamageinseveralcountriesintheregion.

ThecrisisisaffectingGulfCooperationCouncil(GCC)

11

andnon-GCCcountriesthroughdifferentchannels.InGCCcountries,themaintransmissionchannelsinclude

directsecurityrisks,disruptiontooilandgasexports,

reducedtransportandlogisticsactivity,weakertourism

andbusinessconfidence,anddelaysininvestment.In

non-GCCeconomies,theeffectsaregenerallymorelikelytobetransmittedthroughhigherfuelandfoodimport

costs,lowerpurchasingpower,weakerdemandfromGulfeconomies,pressureonremittancesandtighterpublic

finances.Asanoil-producingcountry,Iraqisalsoaffectedbydirectdisruptionstooilexportroutes,similartoGCC

producers.Insomeothercountries,suchasLebanon,militaryactivityremainsamajorconcern,further

exacerbatingthesechallenges.

Theregionaleconomicoutlookhasdeteriorated

sharply.TheIMFprojectsrealGDPgrowthintheGCCat

around2percentin2026,about2.3percentagepoints

lowerthanpre-warprojections,reflectingdirect

disruptionsinGulfeconomiesandwiderspillover

effects

.12

UNDPestimatesalsosuggestsizeableoutput

losses,withGDPinsomenon-GCCeconomiesprojectedtodeclinebybetween5.2and8.7percentcomparedwithano-conflictscenario

.13

Whiletheseestimatesarenot

directlycomparableandremainsubjecttouncertainty,

7IMF.2026.

April2026RegionalEconomicOutlookUpdate:MiddleEastandCentralAsia

8UNDP.2026.

MilitaryEscalationintheMiddleEast:ReversalsInGlobalDevelopment,PolicyResponseOptions,

13April2026.

9Source:

ILOSocialProtectionMonitor,

availableat,accessedon14May2026.

10TheArabStatesregionfollowsⅠLO’sdefinitionandcomprises12countries,namely:Bahrain,Ⅰraq,Jordan,Kuwait,Lebanon,Oman,OccupiedPalestinianTerritory,Qatar,SaudiArabia,theSyrianArabRepublic,theUnitedArabEmiratesandYemen.

11GulfCooperationCountries(GCC):Bahrain,Kuwait,Oman,Qatar,SaudiArabiaandUnitedArabEmirates.Non-GCCcountriesintheArabStatesgroupingoftheILO:Iraq,Jordan,Lebanon,SyrianArabRepublic,YemenandOccupiedPalestinianTerritory.

12IMF.2026.

RegionalEconomicOutloUokUpdate:MiddleEastandCentralAsia

,April2026.

13UNDP.2026.

MilitaryEscalationintheMiddleEast:EconomicandSocialImplicationsfortheArabStatesregionAssessment.

>EmploymentandSocialTrends:May2026Update7GrowinglabourmarketrisksoftheMiddleEastcrisis

theypointinthesamedirection:slowergrowth,highercosts,weakertourismandlogisticsactivity,greaterfiscalpressures,andincreaseduncertaintyforenterprisesandinvestors.

Thesepressuresarelikelytotranslatequicklyinto

labourmarketimpacts.ThefollowinganalysisexamineshowthecrisismayaffecthoursworkedandemploymentintheArabStatesandwhichsectorsandworkersare

mostexposed.

Impactonhoursworkedand

employment:Ascenarioanalysis

Toidentifytheregion-specificeffects,threescenariosareusedtoassessthelabourmarketimpactofthe

crisisintheArabStates2026.Thescenariosrelyona

crisissignalextractedfromhigh-frequencyGoogleTrendsdatausingasmallneuralnetwork.Thisapproachhas

beendevelopedspecificallytoassesstheimpactofthe

crisisintheArabStatesregion,astheoil-shockmodellingapproachusedintheglobalandAsiaPacificexercisesisnotsuitableforuseintheregion

.14

Theestimatesshowhowhoursworkedandemploymentcoulddeclineunderthethreescenarios

.15

Thescenarioscapturethreepossiblecrisispaths.

Underrapidde-escalation,theinitialshockfadesrelativelyquicklyandeconomicactivitybeginstonormalizeduringtheyear.Underaprotractedcrisis,disruptionremains

elevatedthrough2026,affectingbusinessactivity,

investment,mobility,tradeandconfidence.Undersevereescalation,thecrisisintensifiestoalevelofconflictwell

abovetheMarch2026situation,leadingtodeepandpersistentdisruptiontoeconomicactivity.

Evenrapidde-escalationwouldleaveavisiblelabour

marketimpact.Usinghigh-frequencydatatocapture

earlysignsofdisruption,thesimulationssuggestthat

totalhoursworkedintheArabStateswoulddeclineby1.3

14Theestimatesarebasedonaregion-specificempirical

approachthatuseshigh-frequency(monthly)GoogleTrendsdataandaneuralnetworktodetectabrupteconomicdisruption.Inasecondstage,theimpactofthesignalonhoursworkedand

employmentisestimatedandusedforthescenarioprojections.Thisapproachdiffersfromthemacroeconomicmodelling

approachusedfortheglobalandAsiaandthePacificresults,

whichfocusesonthelabourmarketeffectsofanoilpriceshock.Thereasonismethodological:thecrisisaffectstheArabStatesin

percentandemploymentby0.7percentin2026,comparedwithano-conflictscenario(Figure3).

Underaprotractedcrisis,hoursworkedareprojectedtofallby3.7percentandemploymentby2.1percent;underescalation,thelossescouldreach10.2percentand5.9percent,respectively.Givencontinued

uncertaintyaroundenergyflows,airspacerestrictions,

traderoutesandsecurityconditions,aprotractedcrisis–andevenrenewedescalation–remainsaplausiblerisk.

ProjectedimpactsarelargeronaverageinGCC

countriesthaninthenon-GCCcountriescoveredby

theanalysis.ThisreflectstheGCC’smoredirectexposuretodisruptionsinenergy,transport,logistics,tourismandbusinessconfidence.Inthesimulation,hoursworked

couldfallby11.5percentintheGCCunderthesevere

escalationscenario,comparedwith7.7percentinnon-

GCCcountries.Employmentcoulddeclineby7.1percentintheGCCand4.4percentinnon-GCCcountries.The

non-GCCaggregatefigureexcludestheOccupied

PalestinianTerritoryandLebanon,thelatterbeingamongthemostseverelyaffectednon-GCCcountriesinthe

region.

Thescaleoftheselossesislargebyhistorical

standards.DuringtheCOVID-19crisis,hoursworkedin

theArabStatesfellby4.4percentin2020comparedto

theprioryear.Theprotractedcrisisscenariowouldbringlossesclosetothatscale,whilethesevereescalation

scenariowouldimplyashockmorethantwice