In times of crisis, risk is thrown under the microscope and former assumptions are reassessed.
From the political climate to the flow of international trade, the impact of COVID-19 has destabilized macroeconomic conditions around the world.
And the good news is Australia falls in the low risk category.
Data for the risk map comes from Euler Hermes, and it scores macroeconomic risk primarily based on the following categories: political risk, structural business environment, commercial risk, and financing risk.
The political risk category, for example, takes into account the concentration of power in a country.
It also assesses the degree of independence of national institutions and social cohesion.
In total, a country’s macroeconomic risk profile is determined, representing the broad risk of non-payment of companies within a country.
As central banks in wealthy countries press ahead, the end of stimulus packages still seems like a distant prospect.
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Together, rich nations are projected to borrow a combined 17% of their GDP in this year alone.
This, matched with low inflation, is helping to defend economies from collapse.
Even though Australia has fallen into recession, most economists believe that there will be a very slight positive growth in GDP in the current third quarter, if not we will move out of recession in the fourth quarter of this year.
We are still the lucky country!
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