We rank 91 sovereigns by how their food inflation, energy inflation, growth, and public debt responded to strong El Niño years since 1990. The headline ranking then narrows to the 53 countries with an established El Niño climate link. Indonesia, Brazil, and Ecuador top the list.
We find some evidence that credit markets price El Niño risks to these vulnerable sovereigns. Notably, higher scoring sovereigns had more volatile five-year CDS spreads in 2015-17. Most of this effect was due to weaker credit quality, though, and every strong episode since 1990 overlapped with a larger global shock, like the Asian financial crisis and the post-Covid inflation spike. The 2023-25 window gives the first sign of a separate El Niño effect.
We then overlay AFII’s Co₂liseum sovereign transition scores to our rankings, and find five sovereigns that are weak on both physical and transition risk. Indonesia has the worst Co₂liseum score of 9, the top El Niño ranking, and USD547bn of public debt. India, Thailand, Mexico, and Malaysia complete the list.
