The GlobalData Regional and Global Risk Index (GCRI) has ranked the Middle East and Africa (MEA) region’s top 10 lowest-risk nations as the UAE.
According to a recent analysis by GlobalData, the region has been impacted by supply chain disruptions and the ensuing rise in costs of necessities like food and fuel, which have exposed it to growing threats from food insecurity as well as rising debt.
As one of the MEA countries with the lowest risk, Saudi Arabia placed third in the GCRI. Bahrain placed tenth on a regional level, while Qatar and Kuwait came in at positions four and five, respectively.
Out of the 100 in the GCRI Q4 2022 update, the MEA region’s risk score increased from 54 to 54.3 because it imports most of its staple foods from Russia and Ukraine, the two countries currently involved in a year-long war.
Bindi Patel, an economic research analyst at GlobalData, informed media outlet Mubasher that the OPEC+ decision to reduce oil production could impact the profitability of oil-producing nations in the MEA region, which heavily relies on energy exports to drive their economies.
The official also added that many nations in the region depend heavily on food imports, and disruptions to supply chains because of conflicts in Ukraine and Syria, drought in Horn of Africa nations, and Kenya create significant challenges for food security.
In 2022, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) stated that 35 million people in West and Central Africa were undernourished. By the 2023 end, experts have predicted that this number would increase to 48 million.
Roberta Gatti, the chief economist for the MENA (Middle East and North Africa) area at the World Bank, recently predicted that in 2023, one in five residents of developing MENA nations would likely experience food insecurity.
According to Roberta Gatti, nearly 8 million kids under the age of five will go hungry. Even a temporary increase in food prices can have long-lasting and frequently irreparable effects.
The inflation rate in the MEA region would continue to be frighteningly high despite the implementation of stricter monetary policies, according to GlobalData’s Bindi Patel, with only a slight decline anticipated.
According to Bindi Patel, the region’s inflation rate would be 18.7% in 2023, with exceptionally high rates projected in Egypt (23.3%), Iran (40.7%), Turkey (43.7%), and Nigeria (19.3%).
“The overall risk for the countries in the region is still upward,” the GlobalData analyst said, “as further slowdown in the global economy, tightening monetary conditions, general geopolitical tensions, and rise in poverty and food insecurity continues to adversely affect the MEA economies.”
However, recent research by Mubasher Capital revealed that the GCC member nations’ economies would expand at a rate of 3.9% throughout 2023, which is twice as fast as the 1.7% global growth predicted at the time.