Country Risk Atlas: in 2023, 21 economies saw their risk rating upgraded while only 4 were downgraded.
· The first edition of Allianz Trade’s Country Risk Atlas assesses the economic, political and ESG factors influencing non-payment risk for companies in 83 economies.
· In 2023, Allianz Trade upgraded 21 country risk ratings (+13 vs 2022) and downgraded only 4 (-13 vs 2022), indicating increased resilience despite global shocks.
Allianz Trade today releases its first Country Risk Atlas, a new flagship publication focused on country risk, an expertise the world leader in trade credit insurance has built up over decades. The Country Risk Atlas is based on a proprietary risk ratings model that is updated every quarter with the latest economic developments and Allianz Trade’s proprietary data on global insolvencies and the business environment.
“The Country Risk Atlas provides comprehensive analysis and insights into economic, political, business environment and sustainability factors that influence trends in non-payment risk for companies at a macroeconomic level. It aims to be a companion for businesses and investors in making informed decisions by identifying potential risks and opportunities in 83 different economies, along with the map we produce quarterly for all the 241 countries and territories we monitor every year”, states Ana Boata, Head of Economic Research at Allianz Trade.
In its first Country Risk Atlas, Allianz Trade reveals that it upgraded[1] 21 country risk ratings in 2023 while downgrading only 4. The trend is totally different from that of 2022, when Allianz Trade upgraded only 8 country risk ratings while downgrading 17.
“In 2022, our country risk ratings were largely influenced by the repercussions of the war in Ukraine. But in 2023, the global economy has shown a certain resilience against one of the most aggressive global monetary policy tightening cycles and in the face of some major global shocks. As such, we have upgraded 21 economies’ risk ratings, equivalent to around 19% of the global GDP. Africa has seen the most upgrades (10), followed by Europe (6), while only China and Uruguay have seen their country risk trajectories improve in Asia and the Americas, respectively. However, Africa remains the continent with the greatest difficulties in terms of liquidity and access to international markets at a time when liquidity risk is increasing almost everywhere. Against this backdrop, the current cycle and enduring fiscal and monetary policy efforts may trigger further upgrades in the Americas, with Africa and the Middle East most likely to fall behind”, adds Ana Boata.
Overall, when looking at the average of all of Allianz Trade’s country risk ratings, the global risk of non-payment for companies in 2023 stands slightly above 2 (Medium Risk), stable compared to 2022 and almost back to 2019 levels. Regionally, Africa’s average risk rating stands above 3 (Sensitive), while the Middle East, Latin America and Eastern Europe (incl. Russia) are close to but below 3 (Sensitive). Asia Pacific is slightly above 2 (Medium) and Western Europe and North America are close to 1 (Low).
Looking ahead, several factors could challenge the country risk landscape, leading to more downgrades in 2024.
Among the major risk factors identified by Allianz Trade for 2024 are:
· Liquidity constraints in an environment of high public and private debt and high interest rates.
· Below-potential growth in most regions and lower pricing power for corporates, which will drive revenue growth downwards.
· Rising business insolvencies (+8% globally in 2024), with Europe and the US leading the acceleration.
· Changes in global supply chains, which could take a toll on countries with twin deficits, mainly on current account balances.
· Increasingly polarized geopolitics in a packed election year, with economies accounting for 60% of global GDP heading to polls.
Find out more and discover all our country risk profiles and ratings in the Country Risk Atlas!
[1] An upgrade means an improvement of the country risk rating and thus a decreasing risk.
Press contact
Maxime Demory
+3306 46 21 72 69
maxime.demory@allianz-trade.com
FAQs
“The Country Risk Atlas provides comprehensive analysis and insights into economic, political, business environment and sustainability factors that influence trends in non-payment risk for companies at a macroeconomic level.
What is the Allianz country grade? ›
The country grade measures economic imbalances, the quality of the business climate, and the likelihood of political hazards.
What is a risk atlas? ›
The Country Risk Atlas is designed to help businesses and investors make informed decisions by identifying potential risks and opportunities around the world.
What is the country risk index? ›
The index scores each country on a scale of 0-100, with 100 being the lowest risk. Each country has a headline Operational Risk Index score, which is made up of four categories of analysis, each further broken down into three sub-sectors.
What is country risk used for? ›
Country risk assessment, also known as country risk analysis, is the process of determining a nation's ability to transfer payments. It considers political, economic and social factors, and is used to help organizations make strategic decisions when conducting business in a country with excessive risk.
What are the indicators of country risk? ›
Country risk covers a wide range of factors such as political developments, the risk of (armed) conflict and sovereign financial situation. These factors relate, for example, to regulatory changes, the risk of confiscation, civil unrest, war, currency controls and devaluations.
What is Allianz weakness? ›
Allianz Weaknesses
Heavily dependent on automobile market. Stiff competition with other major players.
What is the reputation of Allianz? ›
Allianz Insurance has an 'Excellent' Trustpilot rating of 4.5 out of five, based on more than 17,100 reviews.
Where does Allianz rank? ›
In 2023, Allianz continued its rise up the Best Global Brands Ranking, coming in at #31 (+3), retaining its #1 insurer status for the fifth year running and recording a total brand value of 20.85 billion USD.
What is the Atlas Index? ›
Index. The index is found at the back of the atlas and lists towns, cities, countries and continents in alphabetical order. Next to each place name is a list of all the pages in the atlas this location can be found. Often a town or city will appear on multiple maps at different scales and covering different topics.
Risk is a strategy board game of diplomacy, conflict and conquest for two to six players. The standard version is played on a board depicting a political map of the world, divided into 42 territories, which are grouped into six continents.
How do you use a risk map? ›
A risk map is built by plotting the frequency of a risk on the y-axis of the chart and the severity on the x-axis. Frequency is how likely the risk is or how often you think it will occur; severity is how much of an impact it would have if it did happen.
What is the country risk level? ›
Country risk refers to the uncertainty associated with investing in a particular country, and more specifically the degree to which that uncertainty could lead to losses for investors. This uncertainty can come from any number of factors including political, economic, exchange-rate, or technological influences.
How do you calculate country risk? ›
How Do You Calculate the Country risk Premium? You estimate a country's risk premium by multiplying the default spread by the equity market volatility.
Which country has the highest risk? ›
Highest-Risk
- Afghanistan. #1. Country Rank. Our statistical model estimates that there is a 6.5%, or approximately 1 in 15, chance of a new mass killing beginning in Afghanistan in 2023 or 2024. ...
- Pakistan. #2. Country Rank. ...
- Yemen. #3. Country Rank.
The Atlas was developed to guide decision makers, implementers and the general public with valuable information about disaster in the Country, give highlights on the Geography of Uganda, hazards, vulnerability, losses, risk reduction measures in different parts of the Country with major hazards identified are; drought, ...
What is the country credit risk? ›
Country risk refers to the economic, social, and political conditions and events in a foreign country that may adversely affect a financial institution's operations. Banks must institute adequate systems and controls to manage the inherent risks in their international activities.
