The covid-19 pandemic is an unprecedented socioeconomic crisis in its nature and magnitude, causing a shock on both supply and demand side. As the virus spread around the world in no time, severe containment measures (lockdown, travel restrictions, border closures, curfew, etc.) had to be imposed across all the regions of the world. Those measures impacted economic activity, business and consumer confidence, financial markets, supply chains and movement of people and goods worldwide. Over the past months, we saw a very rapid and sharp deterioration of global economic conditions, a significant drop in commodity prices (particularly oil) and a huge reversal of capital flows in emerging markets.
In this context of global recession, Credendo needed to revise its risk ratings. Hence, since the outbreak of the covid-19 pandemic, a record number of countries have been downgraded for the short-term political risk and commercial risk. The world risk map below shows the magnitude of the changes. And as you’ll see, no region was spared.
Commercial Risk Map 2019
Commercial Risk Map 2020
Short-Term Risk Map 2019
Short-Term Risk Map 2020
Given this year’s gloomy risk outlook, further downgrades are possible in the coming months. However, there is some silver lining: containment measures being gradually lifted in most regions now should allow for a rebound in the second half of the year. However, this forecast is very uncertain. All this largely depends on the eventual duration and severity of the pandemic. The future will become less uncertain as soon as a potential vaccine or effective therapy has been developed.
For more information on specific country risks, please contact your account manager.
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