Country Risk Quarterly: Instability on the rise
EDC monitors the impacts of COVID-19 and the conflict in Ukraine on Canada and the global economy.
Top 3 country risks findings:
1. The short-term economic outlook is challenging; driven by weak growth, elevated inflation and interest rates that have risen rapidly. This volatile situation will influence both consumer and corporate spending.
2. Geopolitical risk is the potential for international tensions to threaten the financial stability of businesses around the globe. Russia’s invasion of Ukraine has caused this risk to spike as the result of new sanctions, the global energy crisis and ongoing supply chain disruptions. An increasing number of companies are considering how a new geopolitical reality impacts their operations.
3. Government finances, particularly in emerging markets, are coming under strain as public debt levels hit a record high and global credit conditions tighten even further. To avoid default, several countries are seeking support from the International Monetary Fund (IMF) and official creditors. Companies dealing directly with a sovereign should consider that country’s credit profile.
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