Mubasher: The UAE has topped the 10 lowest risk countries across the Middle East and Africa (MEA) region in GlobalData Regional and Global Risk Index (GCRI) for the fourth quarter (Q4) of 2022.
The region is seen affected by supply chain disruptions and the consequent increase in prices of essential commodities such as food and fuel, which made it face mounting risks from food insecurity as well as rising debt, according to a recent report by GlobalData.
Saudi Arabia came in the third place as one of the lowest risk MEA nations in GCRI. Qatar and Kuwait followed in the fourth and fifth regional ranks, respectively, while Bahrain came in the ninth position on a regional level.
The MEA region depends mainly on Russia and Ukraine for imports of staple food items; therefore, its risk score went up from 54 to 54.3 out of 100 in the GCRI Q4 2022 update.
Economic Research Analyst at GlobalData, Bindi Patel, said: “The decision by OPEC+ to cut oil production can impact the profitability of oil-producing nations in the MEA region, which rely heavily on oil exports to drive their economies.”
Patel elaborated: “At the same time, many countries in the MEA region are heavily dependent on food imports, and disruptions to food supply chains due to factors such as conflict in Ukraine and Syria, drought in Horn of African nations and Kenya continue to create significant challenges for food security.”
According to United Nations Office for the Coordination of Humanitarian Affairs (OCHA), a total of 35 million individuals were reported as hungry people in West and Central Africa in 2022. This number is seen to surge to 48 million by the end of 2023.
Roberta Gatti who serves as the World Bank’s Chief Economist for the MENA region recently stated that nearly one out of five people living in developing countries in MENA is likely to be food insecure in 2023.
Gatti said: “Almost 8 million children under five years of age are among those who will be hungry. Food price inflation, even if it is temporary, can cause long-term and often irreversible damage."
GlobalData’s Patel meanwhile noted that in spite of applying tighter monetary policies, the inflation level in the MEA region would remain alarmingly high, with only a marginal decrease projected.
Patel added: “The inflation rate in the region is estimated to be 18.7% in 2023, with particularly high rates anticipated in Egypt (23.3%), Iran (40.7%), Turkey (43.7%), and Nigeria (19.3%).”
The analyst from GlobalData concluded: “The overall risk for the countries in the region is still upward, as further slowdown in the global economy, increasing tighter monetary conditions, overall geopolitical tensions, and rise in poverty and food insecurity continue to negatively weigh on the MEA economies.”
A recent report by Mubasher Capital, however, unveiled that the economy of the GCC member states would grow at 3.9% throughout 2023, which marks twice the pace of the estimated world growth of 1.7%.