- The Country Risk Atlas provides comprehensive insights on the economic, political and business environment and sustainability factors that influence non-payment risk for companies in 84 economies. Our analysis is based on our 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 is designed to help businesses and investors make informed decisions by identifying potential risks and opportunities around the world.
- 2023 was marked by signs of resilience in many markets. We upgraded 21economies that account for around 19% of global GDP, up from eight in 2022. This list included several emerging markets, notably China, South Africa, Qatar, Algeria, Morocco, Oman, Bulgaria, Tanzania and Uruguay, which showcased their resilience to global shocks. The outlook for several advanced economies also improved, including Croatia (with a double upgrade in Q1 and Q4), Cyprus, Greece, Iceland and Slovenia. However, we also downgraded four economies in 2023, notably Egypt because of a gloomier outlook for available liquidity and Israel due to increased political risk. In terms of regions, Africa has seen the most upgrades (10), followed by Europe (6), while only China and Uruguay have seen their 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.
- Overall, the global risk of non-payment for companies stands at Medium Risk, almost back to 2019 levels. Africa’s average risk rating stands above three (Sensitive), while the Middle East, Latin America and Eastern Europe (incl. Russia) are close to but below three (Sensitive). Asia Pacific is slightly above two (Medium) and Western Europe and North America are close to one (Low).
- Looking ahead, several factors will continue to challenge the risk landscape. First, we expect liquidity constraints in an environment of high public and private debt and high interest rates. Second, below-potential growth in most regions and
- lower pricing power for corporates will drive revenue growth downwards. Third, business insolvencies are set to increase (+8% globally in 2024), with Europe and the US leading the acceleration. Fourth, global supply chains are changing, taking a toll on economies with twin deficits, mainly on the current account balances. Finally, increasingly polarized geopolitics will increase uncertainty in a year packed with elections, with economies accounting for 60% of global GDP heading to polls.
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Authors
Ludovic Subran
Allianz SE
Allianz SE
Nikhil Sebastian
Allianz Trade
Allianz Trade
Maddalena Martini
Allianz SE Branch Rome
Allianz SE Branch Rome
Dan North
Allianz Trade
Allianz Trade
Francoise Huang
Allianz Trade
Allianz Trade
Jasmin Gröschl
Allianz SE
Allianz SE
Maxime Darmet
Allianz Trade
Allianz Trade
Manfred Stamer
Allianz Trade
Allianz Trade
Luca Moneta
Allianz Trade
Allianz Trade