INVESTIR: Insights from the ICRG, June 2026

AMERICAS:

BOLIVIA – To pacify the country, President Paz announces that he and his entire cabinet would slash their own salaries by 50%. Protesters rejected the pay cut, branding it a meaningless stunt, and are openly demanding his immediate resignation. The executive branch is isolated and failing to govern.  The economy is expected to contract by over 3% in ’26; inflation is set to clock 20%+. A debt reprofiling (restructuring payment terms) is likely necessary to restore long-term sustainability.

BRAZIL – The government spent May attempting to prevent a full-blown financial crisis, collecting collected a record $203bn in taxes in the first four months of ’26. Yet mandatory costs like pensions and public payroll exploded anyway. Consumer confidence drops, with lower-income families earning up to $928.00 showing the worst collapse in future expectations. 

WESTERN EUROPE:

FRANCE – Approval rating for Macron at historic lows. With former Prime Minister Gabriel Attal launching his presidential bid on May 22, the centrist ruling bloc is officially fracturing early to prepare for the 2027 elections. As such, Prime Minister Sébastien Lecornu will have an even harder time holding his fragile legislative alliance together over the coming months. 

SLOVENIA – Following a near-deadly tie in the March 22 general elections, Prime Minister Janša successfully assembles a five-party, center-right coalition. On May 22, the 90-member National Assembly voted 51 to 36 to officially approve him.  The new coalition holds 50 out of 90 seats in parliament, backed by smaller conservative groups (NSi, SLS, Focus, Democrats). Crucially, the pro-Russian, right-wing Resnica (Truth) party is supporting them from the outside. 

EASTERN EUROPE: 

ALBANIA – Polls show Rama’s Socialist Party (PS) tracking at 52.4%. The opposition protests, while violent, are suffering from “dwindling popular support” and internal fragmentation. Growth for ’26 set to reach 3.2%; budget deficit of around 2% of GDP.

CROATIA – The ruling conservative Croatian Democratic Union (HDZ) party holds a firm grip on the parliament and the prime minister’s office. They have a steady polling lead at 33.7%, meaning there is very small chance of a government collapse or early snap elections.

ASIA:

SRI LANKA – Public approval for the government stands at 65% – an exceptionally high baseline for a post-crisis administration, driven heavily by successful anti-corruption campaigns and crime reduction. However, these surveys do not fully capture the rapid onset of the May 2026 energy restrictions. Demand for mid-tier consumer electronics, apparel, and vehicles is actively stalling. 

PAKISTAN – The State Bank of Pakistan (SBP) officially received a $1.3 billion cash injection from the IMF following a successful program revie, temporarily boosting foreign exchange (FX) reserves and preventing an outright balance-of-payments collapse. The IMF explicitly warns that Pakistan’s debt-repayment capacity remains incredibly “fragile”. To conserve dollars, the central bank maintains highly restrictive scrutiny over capital flight. 

MIDDLE EAST

EGYPT – Consumer confidence is rising from previously historic lows, though it remains deeply fragile. Sentiment has stabilized due to a steady cooling of inflation and the relative anchoring of the Egyptian pound following massive multi-billion dollar IMF and international investment packages.

TUNISIA – The National Bar Association of Tunisia officially launched an expanding general strike, forcing lawyers to wear red armbands and march out of courtroom proceedings across Tunis. The local court system was cripple, with lawyers announcing a subsequent nationwide general court strike scheduled for June 18 to protest the mass arrests of colleagues.  On May 16–17, hundreds of Tunisians flooded the streets of the capital, chanting slogans directly calling Saied a dictator and demanding an end to the severe economic crisis.

AFRICA

ANGOLA – Executive cohesion is fraying as the race to succeed President João Lourenço heats up. Two distinct factions have emerged: one loyal to Lourenço and another comprising “spurned generals” and figures aligned with the late dos Santos family. Nonetheless, the President retains strong control over key appointments. The 2026 budget introduced a foreign exchange levy on outbound payments processed through commercial banks – effectively a tax on repatriating profits, and raising the cost of doing business.

KENYA – Former Deputy President and current opposition leader Rigathi Gachagua launches a public broadside against President Ruto, openly warning that the administration is “staring at disaster” due to reckless handling of national security and mismanagement. The economy is expected to expand by 4.4% to 4.5% in 2026, with inflation remaining manageable around 5% to 5.9%. The external debt profile remains critical but stable following a recent credit upgrade.

Best political risk (Month-on-Month, 2025)

Bahrain (3.0)

Bulgaria (3.0)

Syria (3.0)

Worst political risk (Month-on-Month 2025)

Kuwait (-1.5)

Bolivia (-1.0)

Colombia (-1.0)

Best composite risk (Year-on-Year, March 2025)

Syria (9.8)

Yemen (6.3)

Suriname (3.5)

Worst composite risk (Year-on-Year, March 2025)

Iran (-14.5)

Botswana (-5.8)

Cuba (-4.5)

RISK DATA POSITIONS

Bullish

XLE (Energy Select Sector SPDR Fund

GLD (SPDR Gold Shares

SGOV (iShares 0-3 Month Treasury Bond ETF

EWJ (iShares MSCI Japan ET

Bearish

EWJ (iShares MSCI Japan ET

EMB (iShares J.P. Morgan USD Emerging Markets Bond ETF)

FXI (iShares China Large-Cap ETF):

WHAT’S NEW?

SCALING FOUR DECADES OF GEOPOLITICAL RISK DATA

While the summer months traditionally bring a seasonal lull to global markets, we have been leveraging this quiet period to re-engineer our delivery models to transition our proprietary risk metrics into a fully integrated Data-as-a-Service (DaaS) platform. While our existing delivery modes will continue, this upgrade is designed to move toward an agile infrastructure. Over the next couple of months, PRS’ developers will be focused on building robust API architectures and fortifying historical datasets. 

Subscribers will be able to seamlessly query our deep archive of global risk metrics—spanning from the high-inflation eras of the 1980s through the 2008 financial crisis up to the current macro landscape—ensuring algorithmic models are trained on the most complete institutional risk dataset available. 

THE 2024 NOBEL PRIZE IN ECONOMICS & SUMMER READING

This transition to automated, deep-data access comes at a time when the academic and institutional validation of our datasets has never been higher. The proprietary datasets curated by the International Country Risk Guide (ICRG) played a foundational role in the empirical research that secured the 2024 Nobel Prize in Economic Sciences. The laureates—Daron Acemoglu, Simon Johnson, and James A. Robinson—were recognized for their groundbreaking work proving how societal institutions heavily dictate long-term macro prosperity. In their seminal papers, the authors needed a highly precise, historic metric to quantify property rights security and institutional health, turning to the ICRG “Protection Against Expropriation Risk” index as their primary dependent variable. By plotting global economic histories against your financial risk scores, they conclusively proved that where extractive institutional structures exist, financial risk and long-term economic stagnation persist for decades.

SUMMER READING

This Nobel Prize-winning focus on foundational metrics underscores why mastering contemporary sovereign debt frameworks is vital for today’s institutional portfolios. In her recent book, The Sovereign Debt Investor: An Essential Guide to Returns, Defaults, and Government Bond Investing, veteran macroeconomist Lupin Rahman argues that traditional risk metrics are baseline obsolete, asserting instead that modern country risk is aggressively driven by rapid geopolitical fragmentation, internal political polarization, and climate vulnerabilities. For asset allocators, Rahman’s main premise is that sovereign risk must be dynamically re-evaluated as an operational portfolio strategy rather than a static credit score, equipping managers to isolate structural winners from losers amidst shifting global yield spreads. 

Complementing this practitioner’s view is the advanced quantitative perspective found in The Economics of Sovereign Debt and Default by Mark Aguiar and Manuel Amador. The authors bypass standard historical narratives to present a unified mathematical framework analyzing capital runs and fiscal crises. Their central premise is that sovereign default is fundamentally a strategic political decision stemming from a lack of strong external legal enforcement, arguing that nations balance the deadweight costs of default against domestic political survival and future market access. This text provides the precise computational modeling and general equilibrium equations needed by quantitative research subscribers to calculate default probabilities. Learn more about these core frameworks via the Wiley Professional Catalog and the Princeton University Press.

To complement these macroeconomic frameworks, a selection of lighter narratives can help swap cold data matrices for human perspectives on international relations and geopolitical friction. 

Moving from regional grand strategies to granular operational friction, M.P. Woodward’s hyper-realistic thriller The Handler depicts how covert intelligence operations and global financial sanctions clash in real time as a disgraced operative attempts a high-stakes asset exfiltration in Tehran and Dubai, providing a fast-paced, expert look at the plumbing of modern economic warfare. 

In a similar vein, Christopher Reich’s new one, The Tourists, is a fast-paced espionage thriller that follows retired CIA agent Mac Dekker as he launches a frantic search through Paris after his partner, former Mossad operative Ava Attal, mysteriously vanishes during a dinner proposal. His investigation forces him back into the shadows of the intelligence world, where he must dodge deadly assassins while racing against the clock to stop a ruthless prince’s imminent nuclear terror plot. 

Finally, one of my favorites now that has very little to do with geopolitics is Mona’s Eyes, written by Thomas Schlesser, an esteemed French art historian, professor at the École Polytechnique, and director of the Hartung-Bergman Foundation in Antibes.

The story follows a ten-year-old Parisian girl named Mona who experiences a terrifying episode of temporary blindness. When medical specialists warn that she will likely lose her sight permanently within a year, her eccentric and deeply cultured grandfather, Henry, steps in with a radical, secret plan. Instead of taking her to her scheduled weekly therapy appointments, he intercepts her every Wednesday to visit Paris’s three greatest museums—the Louvre, the Musée d’Orsay, and the Centre Pompidou—racing against time to fill her mind with an indelible reservoir of human beauty before the darkness sets in.

Structured over fifty-two weeks to represent the year of remaining sight, each chapter focuses intensely on a single masterpiece, spanning from Botticelli and Rembrandt to Frida Kahlo and Basquiat. Through these weekly museum excursions, Henry uses the artwork to teach Mona vital philosophical lessons about love, loss, melancholy, and resilience. Schlesser’s core argument in the novel is that great art is not merely an aesthetic luxury, but a vital vehicle for survival and profound self-reflection. 

NEW RESEARCHERS’ DATASETS

Clients should note that our popular Researchers’ Dataset (RDS) series – containing updates from 2025 – is available along with a range of related data series.  The RDS series – derived from our ICRG data – continues to yield unique insights in a range of topics that explore the impact of political risk on conflict and economic growth, inflation and monetary policy, youth unemployment, and political stability, and much more.  Contact us at custserv@prsgroup.com to inquire about the acquisition of the RDS updates.

NEW CLIENTS

May was a very impressive month for new and returning clients. Among our newest client additions are one of the world’s largest sovereign wealth entities in the Middle East, a top-tier private research university in California, and a leading public research institution in the United Kingdom. We have also partnered with a major state-mandated infrastructural investment entity in Southeast Asia. By utilizing our long-term datasets, these institutions are enhancing their academic research pipelines, optimizing multi-billion-dollar cross-border portfolios, and strengthening their strategic macro forecasting engines.

ACADEMIC HAPPENINGS

As always, ICRG and related PRS data continue to be the gold standard of all geopolitical risk data among the scholarly and research communities. In a significant study published by the National Bureau of Economic Research (NBER) titled “Foreign Political Risk and Technological Change,” global instability is seen as a direct catalyst for domestic innovation, as corporations aggressively accelerate local R&D and patenting when foreign supply chains face severe institutional degradation. Utilizing our ICRG datasets, the researchers proved that firms increase innovation specifically to bypass operational dependencies on geopolitical adversaries, a structural shift that permanently reduces import reliance and reshapes international trade patterns. (https://www.nber.org/papers/w33964)

DID YOU KNOW?

Empirical asset-pricing studies using our datasets have established a global political risk factor—known as the “P-Factor”—which carries a significant 11% annualized equity risk premium? Long-term trading simulations tracking cross-border equity portfolios prove that a quantitative strategy which systematically buys stocks in emerging markets with upward-trending ICRG ratings, while short-selling equities in regimes with deteriorating ratings, consistently outpaces the broader market by generating 11.4 percentage points of pure alpha per year. (https://www.sciencedirect.com/science/article/pii/S0927539823000269)