Saudi Arabia came third place among the lowest-risk nations in the Middle East and Africa region in the fourth quarter of 2022, according to the GlobalData Regional and Global Risk Index.
The index is a unique rating model that determines the existing and future levers of country risk by assessing various qualitative and quantitative factors.
The UAE came in first as the lowest-risk nation in the region with Qatar and Kuwait ranked fourth and fifth respectively, while Bahrain came in the ninth position.
The region’s supply chain disruption and consequent increase in prices of essential commodities fueled by geopolitical tensions put it at high risk for food insecurity and rising debt.
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.
“The decision by OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) 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,” GlobalData analyst Bindi Patel said.
“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,” he continued.
Even though the region has been strict in applying monetary policies, inflation level is likely to remain alarmingly high with only a marginal decrease projected, Patel stated.
He added that the inflation rate is estimated to be 18.7 percent in 2023 with high rates anticipated in Egypt, Iran, Turkiye and Nigeria.
“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,” Patel concluded.