Risk Report: Q1 2025 Update

The twenty-seventh update of the the analyst Country Risk Index (GCRI) Q1 2025 ranks Denmark at the top, followed by Ireland and Switzerland. 31 countries were identified in the low-risk zone, 58 countries under medium risk, 54 countries under high risk, and 10 countries in the very high-risk zone in GCRI Q1 2025.

Global Risk Report is based on the analyst Country Risk Index (GCRI) which is a unique country risk-rating model that determines the existing and future level of country risk by assessing various qualitative and quantitative factors. The index is formulated to help firms prepare their global business strategies on the basis of historical developments in an economy and also their future expectations.

The Country Risk Index incorporates the latest available macroeconomics, political, social, technological, environmental and legal data from a range of recognized national and international statistical sources, and incorporates proprietary data from the analyst Economics Research. The model also features expert analytical judgment from in-house economists and takes into account their insights and opinions. By applying a robust approach to assessing risk, The analyst analysts ensure that strategists have an effective tool to assess current trends and risks facing the economies across the globe.

Scope

• Global risk: The Q1 2025 the analyst Country Risk Index (GCRI) shows a modest increase in the risk score, from 55.0 in Q4 2024 to 55.8. This increase is attributed to rising geopolitical tensions and the resurgence of tariff threats from the Trump administration, which have reignited trade frictions and heightened economic volatility.
• Asia-Pacific: The Asia-Pacific region’s risk score increased from 53.4 in Q4 2024 to 54.6 in Q1 2025, owing to China’s slower recovery and growing trade tensions following President Trump’s reimposition of tariffs on numerous APAC economies. These protectionist measures heightened uncertainty around exports, strained regional supply chains, and dampened investor sentiment. The broader impact also led to increased currency volatility and capital outflows, adding to financial stress on the region’s emerging markets. Overall, trade-dependent APAC economies faced a more fragile external environment.
• Americas: The Americas’ risk score increased from 56.6 in Q4 2024 to 57.4 in Q1 2025, driven by uncertainty over President Trump’s protectionist trade policies, including new tariffs. This volatility affected trade expectations and investor sentiment. In Latin America, heightened vulnerability to external shocks has exacerbated concerns, resulting in capital outflows and currency pressures in several emerging markets. These combined factors led to a more fragile economic outlook, increasing the overall regional risk in early 2025.
• Europe: Europe’s risk score increased from 41.0 in Q4 2024 to 42.6 in Q1 2025 due to a combination of structural challenges and global trade disruptions. The region’s economic outlook remains subdued, characterized by rising public spending demands, high debt levels, and weak growth prospects. Despite inflation aligning with targets, lowered growth forecasts highlight the impact of rising trade tensions and global uncertainties. To mitigate these risks, Europe must improve macroeconomic stability, maintain market openness, and advance national structural reforms.
• Middle East and Africa: The risk score for the Middle East and Africa (MEA) increased marginally from 65.4 in Q4 2024 to 65.5 in Q1 2025, primarily due to ongoing geopolitical tensions and economic fragility. Oil-importing nations continue to face disruptions from conflict, while oil-exporting countries struggle with subdued growth from OPEC+ production cuts and declining oil prices. Despite strong non-oil activity in GCC economies, the region remains the highest risk globally, with recovery hampered by global trade tensions and tighter financial conditions.

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