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  • 25-04-23

    GlobalData Report Ranks MENA Region Based on Country Risk

    (MENAFN) According to the GlobalData Regional and Global Risk Index for the fourth quarter of 2022, Saudi Arabia has been ranked as the third lowest-risk nation in the Middle East and Africa region. The index uses a unique rating model that assesses various qualitative and quantitative factors to determine the existing and future levers of country risk.

    The United Arab Emirates (UAE) secured the first position as the region's lowest-risk nation, with Qatar and Kuwait coming in at fourth and fifth respectively. Bahrain was ranked ninth in the region.

    However, the region is still facing supply chain disruption and consequent increase in prices of essential commodities due to geopolitical tensions. This situation puts 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, and as a result, its risk score increased 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 is likely to impact the profitability of oil-producing nations in the MEA region, which rely heavily on oil exports to drive their economies. This was noted by GlobalData analyst Bindi Patel.

    Moreover, 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.

    Despite the region's strict application of monetary policies, inflation levels are projected to remain alarmingly high, with only a marginal decrease expected. Patel estimated that the inflation rate is likely to be 18.7 percent in 2023, with high rates anticipated in Egypt, Iran, Turkiye, and Nigeria.

    In conclusion, Patel stated that the overall risk for countries in the region is still upward due to the further slowdown in the global economy, increasing tighter monetary conditions, overall geopolitical tensions, and the rise in poverty and food insecurity, which continue to negatively weigh on the MEA economies.

    MENAFN25042023000045014228ID1106089847

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