The region faces mounting challenges, including supply chain disruptions, food insecurity, escalating debt and a potential inflation rate of 18.7% in 2023.
Qatar has ranked fourth in the list of the lowest risk nations across the Middle East and Africa (MENA) region according to the GlobalData Regional and Global Risk Index (GCRI) for the fourth quarter (Q4) of 2022.
The ranking places Qatar, which is followed by Kuwait, in a prestigious position, reflecting their relative stability despite the region’s complex risks.
Meanwhile, the UAE topped the list, followed by Saudi Arabia in third place and Bahrain in ninth.
The GCRI Q4 2022 update reflects a turbulent period for the MEA region, marred by supply chain disruptions, price increases in essential commodities, food insecurity and escalating debt.
Staple food items are mainly imported from Russia and Ukraine, causing the region’s risk score to edge upwards from 54 to 54.3 out of 100.
Bindi Patel, Economic Research Analyst at GlobalData, expressed concerns regarding oil-producing nations in the region.
“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 further explained the challenges of food security, citing factors like conflict in Ukraine and Syria, drought in the Horn of African nations, and Kenya. These disruptions contribute to a significant threat to regional food stability.
Roberta Gatti, the World Bank’s Chief Economist for the MENA region, highlighted a distressing projection that nearly one out of five people living in developing countries in MENA could face food insecurity in 2023, including almost 8 million children under five.
“Food price inflation, even if it is temporary, can cause long-term and often irreversible damage,” said Gatti.
Adding to the concerns, Patel noted that the MENA region’s inflation rate is estimated to reach 18.7% in 2023, with particularly high rates in Egypt, Iran, Turkey and Nigeria.
The overall risk for MENA countries continues to trend upwards, driven by factors such as a global economic slowdown, tighter monetary conditions, geopolitical tensions, and a rise in poverty and food insecurity.
Despite these challenges, a recent report by Mubasher Capital indicated a silver lining, projecting that the economy of the Gulf Cooperation Council (GCC) member states, including Qatar, will grow at 3.9% throughout 2023.
This growth rate is twice the estimated global growth rate of 1.7%.