Global political and economic uncertainty ‘persistent’: Marsh report
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Global political and economic uncertainty will remain “persistent” in 2020 on escalating trade tensions, according to a report Tuesday from Marsh LLC.
The broker’s Political Risk Map 2020, produced by Marsh JLT Specialty’s Credit Specialties Practice, is based on data from Fitch Solutions, according to a statement released with the report. It rates more than 200 countries and territories on the basis of short and long-term political, economic and operational stability and gives insight into where risks are most likely to emerge.
Among the risks cited is the novel coronavirus, which could disrupt trade and supply chains, the report said, adding that “economic and political risks will be intertwined in 2020.”
Examples of political risks businesses could be exposed to include currency inconvertibility, trade embargoes, and seizure of assets by host governments, the report said.
Amid the uncertainty, however, “there are pockets of significant opportunity,” the report said. These include emerging markets, which are expected to see real GDP growth of 4.3% this year, up from 3.9% in 2019.
Among individual places studied, Hong Kong experienced the second largest deterioration globally in its short-term political risk index score, after Sudan, following months of protests that have strained its relationship with mainland China, the statement said.
The U.K.’s negotiations over its future relationship with Europe post-Brexit will continue to dominate the political risk landscape in the region, the statement said.
“While this year’s Political Risk Map highlights a challenging geopolitical and economic outlook, there are very significant areas of opportunity for organizations that are equipped to navigate the complex and dynamic risk environment,” Nick Robson, global practice leader, credit specialties at Marsh JLT Specialty, said in the statement.
