Euromoney’s survey shows the pandemic crisis is having both predictable and unexpected effects on economic, political and structural indicators as the world faces the biggest investor shock in living memory.

Protectionism is undermining an otherwise moderate global outlook as growth continues, labour markets tighten and geopolitical crises calm.

Investor safety has come under close scrutiny since June, resulting in a small but discernible decline in the global average risk score, halting a four-quarter improving trend.

Global risk subsided in the first half of the year, according to Euromoney’s country risk survey, with confidence in Europe maintained and commodity producers benefiting from better terms of trade. Yet with US interest rates rising, and Brexit, Russia and protectionism risks prevailing, investor prospects have more recently become uncertain for the remainder of 2018.

The risks of investing in developed countries eased in Q3 2017 due to strong economic growth, according to economists and other experts. Several large emerging markets (EMs) also became safer as volatility eased worldwide.

Euromoney’s latest Country Risk Survey shows a gradual rebalancing of risk scores this year, as the aftershocks of the global banking and sovereign debt crises wear off, political risks tied to the European electoral cycle fade, and capital access improves for EMs.

The calming of the political shock of Brexit, with oil prices now receiving Opec support, is preventing global risks from worsening, yet with a referendum looming in Italy, elections in the US and Europe to come, not to mention frail banks and several countries mired in difficulties, it might be the calm before another global storm.

Country risk scores for many of the large emerging markets (EMs) continued to fall in the first months of the year. Risk scores have now reached levels that do not preclude another global shock if China hits the skids.

Political instability, falling commodity prices, central-bank policy uncertainties and conflict were the principal negative risk factors for investors to contemplate at the turn of the year, as China’s troubles were brought into focus by another round of financial volatility.

China’s risk score fell 1.5 points, to below 60 out of 100, for the first time in almost two years in Q3 2015. With Brazil in freefall and a US interest-rate hike on the cards, investor risk is rising for many – but not all – emerging markets (EMs), complicating portfolio selection.

Emerging markets (EMs) with fiscal and external imbalances, vulnerable to capital outflows – including oil and other commodity producers struggling to balance their budgets – are among the 72 sovereigns downgraded since the end of 2014 by more than 440 economists and other country-risk experts.

The latest results from the Euromoney Country Risk survey point to an unprecedented rise in risk across almost all geographical regions since June, with emerging markets (EMs) taking the biggest hit as doubts over China, the eurozone and US liquidity support weigh heavily on experts’ evaluations.

The latest results from the ECR survey show emerging markets (EMs) becoming riskier during the first half of this year, in contrast to the increasing safety offered by developed countries across the G10 and an improving eurozone.

The rise in global risk witnessed in 2013 continued during the first quarter of this year as experts taking part in Euromoney’s Country Risk Survey reassessed the investment prospects of EMs versus their developed-country counterparts.

Global risk continued to rise in 2013, according to the latest results of Euromoney’s Country Risk Survey. Gloomy analysts remain cautious on the eurozone and the potential impact of the withdrawal of US monetary stimulus on capital flows to emerging market economies.

More than five years on from the credit crunch that shook the world to its core, tail risks continue to undermine investor returns, according to the latest quarterly results of Euromoney’s Country Risk Survey.

More than 400 economists and other experts from a range of financial and other institutions take part in Euromoney’s Country Risk Survey. They evaluate the risks faced by international investors in more than 180 markets, scoring countries across a range of political, economic and structural criteria. These are added to values for capital access, credit ratings and debt indicators, and aggregated each quarter to provide a total risk score.

A broad rebalancing of country risk perceptions has taken place this year, according to the June results of Euromoney’s Country Risk Survey.

The Czech Republic, Estonia, Slovakia and Poland are well-buttressed against contagion from the eurozone crisis, according to the latest quarterly update from Euromoney’s Country Risk Survey.

With Euromoney’s Country Risk Survey showing improved assessments for much of the Americas and Japan during Q1 2013, it is tempting to believe that the increased global risks seen in recent years are finally abating.

All of the G10 countries, with the notable exception of Sweden, saw their risks rise in 2012, according to the latest results from Euromoney’s Country Risk Survey – and not just because of the problems affecting the debt-ridden eurozone sovereigns.

The eurozone became even riskier in Q3 2012, according to the results of Euromoney’s Country Risk (ECR) survey. Spain, the world’s worst performer in the survey during that period, plummeted 14 places, while Italy and Slovenia registered increased risk too. Core economies Germany and France also got riskier in Q3, according to economists. However, there were signs that the worst might be over for the eurozone as a whole, with its average score deterioration slowing to 0.5 points on average in Q3, less than a third of the previous quarter’s fall.

The eurozone is leading most areas of the world in declining ECR scores, according to Euromoney’s country risk survey. The rise in risk is not as steep as in 2011, but it is a source of anxiety for ECR’s 400 experts.

Country risk analysts saw increased risk in all of the world’s main economic/geographical regions during the first six months of 2012, according to the Q2 2012 results of Euromoney’s Country Risk Survey.

The eurozone enjoys its strongest quarter since March 2010 in the latest results of Euromoney’s country risk survey, as European policymakers finally come to grips with the crisis. But lower scores for Greece and France suggest Europe is not out of the woods yet. Andrew Mortimer reports

Country risk scores deteriorate across the eurozone

The euro crisis has already resulted in the region’s country risk scores falling by a greater margin than the Asian economies in 1997. That’s before any of the countries involved has actually defaulted. Andrew Mortimer asks: how many years will Europe take to recover?

Country risk rankings are dropping sharply in the Eurozone periphery and across the entire Middle East, including Qatar which had been viewed as relatively immune to the fallout from the Arab Spring. Andrew Mortimer reports.

With special thanks to the World Bank, Standard & Poor’s, Moody’s Investors Service, Fitch IBCA and the following economists/institutions for their contributions: Adam Antoniak, Bank BPH SA; Anjali Verma, MF Global Sify Securities I Pvt Ltd; Azusa Kato, BNP Paribas; Bernard Musyck, Frederick University; Camilo Perez, Banco de Bogota; Cheng Cheng-Mount, Citibank Taiwan; Colen Garrow, Brait SA Ltd; Dr Olga Mrinska, Institute of Local and Regional Initiatives; Eduard Hagara, ING Barings; Francesca Panelli, Aletti Gestielle SGR SPA; Hans Holzhacker, Nenci Francesca and Rozália Pál, UniCredit Group; Helena Horska, Raiffeisenbank; John R. Harris, Boston University; Julien Manceaux and Dmitry Polevoy, ING; Madan Sabnavis, Credit Analysis and Research Ltd; Maristella Ansanelli, Banco Fibra; Michael Kappeler, LGT Capital Management; Michael Loufir, National Bank of Greece; Nassib Ghobril, Byblos Bank; Nuchjarin Panarode, Capital Nomura Securities; Olena Bilan, Dragon-Capital; Oliver Kovacs, ICEG European Center; Panicos Demetriades, University of Leicester; Peter Meister, BHF Bank Aktien Gesellschaft; Philip Hanson, Chatham House; Plamen Plantev, ISIS; Pornthep Jubandhu, Siam Commercial Bank; Robin Clements, UBS; Shakill K. Hasssan, University of Cape Town, Tiina Helenius, Handelsbanken; Vicky Redwood, Capital Economics; Vitaliy Vavryshchuk, BG Capital; Henry Mo, Credit Suisse; Lana Soelistianingsih, PT Samuel Sekuritas; Michal Dybula, BNP Paribas; Georgy Y. Ganev, Centre for Liberal Strategies; Wei Li, Standard Chartered Bank China; Pragrom Pathomboorn, Siam Commercial Bank; Aysegul Aykol Kocabas; Tekstil Bankasi; Martin Pelucha, University of Economics in Prague ; Galina Borisova Hale, Federal Reserve Bank of San Francisco; Ilias Lekkos, Piraeus bank, Athens; Dalton Gardimam, Banco Bradesco; M. Nicolas J. Firzli, Canadian European Economic Council; Yasuo Yamamoto, Mizuho Research Institute

Euromoney’s latest country risk results reflect political turmoil in the Middle East and the continued uncertainty within the Eurozone. The global recovery is in serious danger of being undermined by a host of financial and political risks. Andrew Mortimer reports.