Which countries are most vulnerable to a global slowdown?

Our analysis shows six countries are particularly at risk in the event of a (sharper than currently expected) global downturn: Argentina, Tunisia, Bahrain, Turkey, Jordan and Cyprus. Another 12 countries are “more vulnerable” and would require close monitoring should the global downturn turn out to be particularly strong. This list also includes one advanced economy: Italy.

As for emerging markets, many of them are more resilient to external shocks or a global slowdown than before the 2008/2009 Global Recession, thanks to better policies and the accumulation of sufficient foreign exchange reserves over the past decade.

Along the external financing channel, there are 18 economies that are notably more vulnerable than others. Eight of them are highly exposed to a global slump (including Argentina, Turkey, Cyprus and Tunisia).

Looking at the (merchandise) trade channel, we identify 45 economies (including many advanced economies) that are very export-dependent and thus are likely to experience a significant cyclical slowdown. Seven of these countries face higher systemic economic risks in the context of overall external liquidity, public and external debt ratios and macroeconomic policies (including Italy, Romania, Croatia and Vietnam).

Along the commodity prices channel, there are 11 important non-fuel commodity exporters (including Argentina and South Africa) and 14 important energy exporters (including Algeria and Oman) which are identified as more vulnerable to a global downturn.

Press contact

Lorenz Weimann
Allianz SE