GlobalData Country Risk Index Drops Slightly in Q4 2024
The global economy stands at a crossroads, balancing trade policy uncertainty and geopolitical tensions against easing price pressures. The latter is supporting a revival in domestic demand and providing central banks with room for potential rate cuts.
Against this backdrop, GlobalData, a leading data and analytics company, reports a slight drop in the GlobalData Country Risk Index (GCRI) from 55.6 in Q3 2024 to 55.0 in Q4 2024.
Global Risk Report Quarterly Update – Q4 2024 highlights that the Americas and the Middle East and Africa (MEA) face high risk scores due to economic instability and geopolitical conflicts.
The Asia-Pacific region, while risky, has a lower score than the Americas and MEA, buoyed by strong growth in emerging economies. In contrast, Europe is the least risky region, benefiting from a solid economic recovery and improved investment sentiment.
Annapurna Pillutla, Economic Analyst at GlobalData, said, “Global economic growth is projected to reach 3.1% in 2024, slightly down from 3.3% in 2023, reflecting both resilience and ongoing challenges.
“While the US economy continues to expand steadily, China’s real estate turmoil and potential US tariff hikes present key risks. Inflation remains above central bank targets in some regions, adding to the economic uncertainty.
“Growth in 2025 is expected to follow a similar trajectory, constrained by geopolitical tensions and policy unpredictability.”
The Trump administration’s proposed tariffs are likely to disrupt the global supply chains and raise business costs. By 2025, these measures could reduce production efficiency and alter trade patterns as companies face higher prices for imported goods and raw materials.
Europe – Steady recovery amid persistent challenges
Europe continues to be the world’s least-risk region, with its risk score improving slightly from 41.4 in Q3 2024 to 41.0 in Q4 2024. The region’s economic recovery is marked by a gradual decline in inflation, improved labor markets, and supportive policy rate cuts by the ECB.
However, geopolitical tensions, particularly involving Russia and Ukraine, along with political shifts to the far right, an aging population and labor shortages, present ongoing challenges. In the Q4 2024 GCRI update, Switzerland, Denmark, and Ireland were identified as the least risky countries, while Ukraine, Turkiye, and Belarus, faced the highest risks.
Asia-Pacific – Resilience amidst geopolitical challenges
The Asia-Pacific region’s risk score decreased from 54.0 in Q3 2024 to 53.4 in Q4 2024, indicating ongoing economic recovery. Projected to account for more than half of global growth in 2025, the region benefits from strong domestic demand and increased exports.
However, risks persist due to geopolitical tensions in the South China Sea and economic slowdown in China. China’s stimulus measures may offset some impact of US tariffs, while easing inflation and resilient consumption in other emerging economies improve the outlook. Strong growth prospects in Vietnam, the Philippines, and Indonesia further enhance regional stability.
In the Q4 2024 GCRI update, the highest-risk countries included Pakistan, Myanmar, and Bangladesh. Conversely, the countries with the lowest risk were Singapore, Taiwan (Province of China), and Hong Kong (China SAR).
Americas – Risk decline amid economic gains and political shifts
Americas’ risk score decreased slightly from 57.0 in Q3 2024 to 56.6 in Q4 2024, reflecting benefits from policy rate cuts and strong consumer spending, particularly in the US.
However, high US debt and fiscal challenges in Latin America persist, alongside political instability marked by protests and governance issues. Donald Trump’s return to the presidency adds to the region’s volatility, potentially affecting economic strategies and stability.
In the Q4 2024 GCRI update, Canada, the US, and Costa Rica were the least risky, while Haiti, Venezuela, and Argentina remained the highest-risk nations.
MEA – Persistent risks amid geopolitical tensions
The MEA regions risk score slightly decreased from 66.3 in Q3 2024 to 65.4 in Q4 2024, driven by growth in the non-oil sector. However, ongoing geopolitical conflicts, particularly in the Middle East, and humanitarian crises continue to pose significant challenges.
Africa faces rising debt and natural disasters, exacerbating food insecurity and displacement. In the Q4 2024 GCRI update, Yemen, Syria, and Burundi were among the highest-risk nations globally, highlighting the region’s persistent instability.
“Geopolitical tensions, trade disruptions, and market volatility present significant challenges for both policymakers and investors. To effectively manage these risks, a sophisticated approach is necessary, emphasizing adaptation and diversification”, Pillutla said.
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