Two years after the start of the pandemic, the global macroeconomic context is progressively improving, albeit in a differentiated manner between countries. However, 2022 will be a year characterized by a slowdown of the global economy with still significant risks, above all political, in the light of the Russian-Ukrainian conflict. This is what emerged from the presentation of the 2022 Risk Map - "(un)usual risks for unusual times: the world in 2022" by Sace. The online interactive globe, to support Italian companies in finding their bearings in the controversial international context, examined 194 countries with an updated set of indicators that evaluate, together with traditional credit risk and political risk factors, also aspects connected to sustainability such as climate change , social welfare and energy transition, defined in collaboration with the Enel Foundation.
World GDP, inflation and trade: the results of the 2022 Risk Map
After the strong rebound in world GDP in 2021 (+5,8%, well beyond the 3,5% contraction recorded in 2020), growth is expected at 2022% in 4,2. Although the context has been conditioned by the continuation of the health emergency, the vaccination campaign has made it possible to mitigate the impacts on global economic activity.
Also the volume of the world trade it is expected to grow by 4,8% after the +11% estimated for 2021, while for services growth is expected to be around 15% and will not allow full recovery of the "loss" of the previous two years. According to the data, the recovery in world economic activity was driven by solid conditions of demand which were offset by critical issues on the supply side, generating upward pressure on prices. Against the backdrop of this scenario in which a climate of still high uncertainty remains, the increase in poverty and social inequalities do not go unnoticed and the fight against climate change and the energy transition are becoming increasingly important.
Risk map 2022: credit risk by geographic area
The 2022 Risk Map, like that of last year, shows brighter risk colors and widespread stability in global risk levels, without however showing the hoped-for trend reversal after last year's marked increases. The credit risk profile of the various geographical areas remained substantially unchanged, confirming the gap between the fragility of emerging countries and the greater solidity of advanced ones.
This is the risk that the foreign counterparty (sovereign, banking or corporate) is unable or unwilling to honor the obligations deriving from a commercial or financial contract. Of the 194 countries analysed, the level of risk decreased in 45, 78 countries remained stable, while it increased in 71.
For financial companies in some countries, Covid-19 still makes recovery difficult, such as in Austria, Ireland and Israel. Resilient United Kingdom and Spain, thanks also to the strengthening of macro-prudential policies, with visible results even in contexts of greater uncertainty in the pre-pandemic phase.
The Sub-Saharan region once again this year presents cases in which the public finance framework reflects negatively on the scores. The Middle East and North Africa region has seen a general improvement thanks to some rather resilient economic conditions. Stable data for Saudi Arabia, United Arab Emirates, Morocco, Egypt and Tunisia. While, in emerging Europe and the CIS, the credit risk is affected by the heavy escalation of the Russian-Ukrainian crisis. In particular, in Sace's credit risk scale Russia went from 62 to 70 and Ukraine from 81 to 90. Belarus (from 82 to 88) and Turkey (from 82 to 83).
Political risk: the Ukrainian crisis "opens up scenarios of uncertainty"
Political risk indicators – which include the risks of war, civil unrest and political violence, the risks of expropriation and contractual violations and the risks of restrictions on the transfer and convertibility of currencies – mark an increase, albeit differentiated between emerging and advanced countries . Of the 194 countries analysed, 38 are improving, 74 are stable and 82 are deteriorating, a consequence of the increase in political violence in almost all cases, especially in light of the various conflicts that broke out between 2021 and the beginning of 2022.
In particular, in emerging Europe and the CIS, the political context in Russia cannot fail to be affected by the current and expected sanctions framework and by the possible responses of the Kremlin. On the other hand, Ukraine clearly discounts Russia's military intervention even if international financial support for Kiev must be considered. And despite a solid fiscal and foreign exchange reserve framework, the sanctions imposed on Russia hinder payments in commercial relations with foreign countries, having effects on the credit risk of public and private counterparties in the country.
The real impacts on the economy are not fully known, since it is an event currently underway and in continuous and rapid evolution, but it is not difficult to imagine that even in the presence of a rapid resolution of the conflict, the counterparts in the country will be more in difficulty to honor their debts.
"We are convinced that exports will continue to be a fundamental engine of the Italian economy, capable of demonstrating, as in the past, strong resilience - he pointed out Pierfrancesco Latini, CEO -. An engine that works at full speed and which is giving an indispensable push to consolidate the restart". The growth of our exports in 2021 compared to the previous year exceeds +18%; a double-digit increase which, according to Sace's guidance, goes beyond the simple post-crisis "rebound effect".
Sustainability indicators and the risks of climate change
Prominent on the world stage is climate change. Among the sets of indicators, climate risks and the related socio-environmental impacts are monitored. Added to these are social welfare and the energy transition.
The map shows how negative climate developments and their impact on natural resources have repercussions on populations, fostering tensions between local communities, especially in Asian regions and Sub-Saharan Africa. In North and Sub-Saharan Africa we are witnessing phenomena of drought and desertification. In Southeast Asia, the impacts of climate change have exacerbated already strong internal ethno-religious divisions.
Europe and Latin America record a continuous improvement in performance within the energy transition. Encouraging results are also seen in Chile and Brazil, followed by the European bloc France, Germany and the United Kingdom. While among the large countries in a more backward position with respect to the energy transition we find Saudi Arabia and Russia due to the availability and use of fossil raw materials, as also demonstrated by the presence of countries such as Libya, Qatar, Iran and Iraq at the bottom of the ranking .
