INVESTIR: Monthly Insights from the International Country Risk Guide (April 2025)

April 2025 Risk Highlights

AMERICAS

Canada – Mark Carney elected as prime minister; Liberals hold minority position in parliament, but opposition Conservative leader loses his seat, providing the new government with some policy space to negotiate with US on new economic and security arrangement. Consumer confidence dips on imposition of US tariffs.

USA – Economy shrinks in Q1 on import surge; relatively small private sector job gains in April; protests mount; President Trump’s approval ratings sag.

WESTERN EUROPE

Estonia – Consumer confidence stalls. A new coalition government takes office in March, led by ALDE Party member Eesti Reformierakond with Eesti 200 as junior partner. Jobless rate around 7.3% (yoy) in April.

Germany – Christian Democratic bloc agrees to a coalition deal with the center-left Social Democrats. Merz, the head of the Christian Democratic Union, will become chancellor, having led his party to an election victory in February. Slight uptick in c consumer confidence in April.

EASTERN EUROPE

Bulgaria – Ruling coalition loses its majority in parliament after the Democracy, Rights and Freedoms party departs the coalition. Consumer confidence takes a dive.

Ukraine – Government fails to reach an agreement to restructure $2.6 billion in GDP-linked warrants ahead of a $600 million payment due May 31. Mineral resource deal with the US ready to be inked.

AFRICA

Gabon – Military leader Brice Oligui Nguema wins presidential election. Few, if any, protests, with some estimates suggesting he won 90% of the popular vote.

South Africa – VAT scrapped as the governing coalition almost dissolves over budget impasse; fissures remain. Rand eases nonetheless over mixed local economic data.

ASIA

Pakistan – Tensions between India and Pakistan rise following a terrorist attack in India-controlled Kashmir, which killed 26 people. Visas suspended for all Indian nationals, some diplomats asked to leave the country. Troops from both sides exchange fire bringing the two sides closer to war.

Thailand – PM sails through a non-confidence vote; terrorism risk remains but incidents from the south are less frequent. US tariffs hit the economy hard.

MIDDLE EAST

Lebanon – Amer Bisat, the economy minister, says his ministry will guarantee full repayment of Lebanese bank deposits “over time” during the restructuring of the local banking sector – a controversial call as losses from inflation, a weak currency, and controls on the banking sector have affected depositor’s ability to withdraw funds.

Turkey – Central bank pledges to maintain tight monetary policy until price stability is achieved. Look for elevated interest rates for some time, supporting D3 risk (Internal Conflict), despite expected crackdown on dissent and opposition figures, notably the arrest of Istanbul mayor Ekrem İmamoğlu— which help send the lira to record lows.

Best political risk (mom)

Gabon (2.5)
Ecuador (1.5)
Russia (1.0)

Worst political risk (mom)

USA (-3.5)
Ukraine (-2.0)
Burkina Faso (-1.5)

Best composite risk (yoy)

Argentina (8.8)
Sri Lanka (8.0)
Niger (7.8)

Worst composite risk (yoy)

Libya (-4.8)
Ethiopia (-3.8)
Mongolia (-2.3)

MARKET/ASSET IMPLICATIONS

Bullish

Gold
India

Bearish
USD/EUR
US equities
China (ST)

WHAT’S NEW?

Christopher was in Rome and Firenze in mid-April, attending client meetings and speaking with a range of private sector firms on the application of the ICRG data to their activities. The meetings coincided with the one in DC between Prime Minister Giorgia Meloni and President Trump. The PM was clearly trying to insert Italy as a bridge between the US and EU, noting their ideological distain for ‘woke’ politics (inter alia), and offering more Italian investment in the US as a buffer to future trade disputes. Time will tell if the strategy bears fruit but such overtures are welcome as the tariffs could prove quite damaging to some of the EU economies.

New and existing clients should note that our popular Researchers’ Dataset (RDS) series – containing updates from 2024 – is now available! The RDS series – derived from our ICRG data – continues to yield unique insights into a range of topics that explore the empirical connection between geopolitical risk and such subjects as asset behavior and prices, inflation and monetary policy, the economic costs of war, forms of internal conflict, and contract repudiation, to name a few. Contact us at custserv@prsgroup.com to acquire about acquisition of the RDS updates or a multi-year series.

Our various AI platforms continue to be built out as we move along in the development of our generative language models. The AI meeting we attended in Montreal brought us in touch with several vendors that will help enhance our offerings. Stay tuned and don’t hesitate to contact us for more information.

The new layout of the new PRS site (www.prsgroup.com) is finished, so feel free to have a look when time permits. The site maintains the basic character of our existing one but adopts a more modern approach – given the emphasis on the importance of our geopolitical risk data – all the while respecting such periods of innovation and new thinking as the Renaissance and the French Enlightenment. In the text, there is a nod to Voltaire, and ‘Gigi’ – our gargoyle mascot – maintains his predominant presence as he represents the power to ward off evil spirits and protect buildings they occupy and those inside!

Our new video series is currently in production. Named ‘Au Courant’ after a previous publication of PRS’ that enjoyed considerable success, the new bi-weekly series will include synopses of timely geopolitical risk events and what they mean for investors and business; trends in the ICRG data and country forecasts; recent academic findings using the PRS data; and the occasional interview with academics and practitioners in the field.

PRS has now surpassed the 7.5 million data point mark in relation to our curated geopolitical risk series! No other risk firm can offer such depth; nor can they claim the mantle of being consistently used in leading academic scholarship and appearing in the top journals, which, according to JSTOR, now occupies just under 1,000 published articles and book chapters.

April was a solid month for new and returning clients, ranging from some of the world’s top universities to the largest institutional investors throughout the US, Europe, the UK, and the Middle East and Asia. We would like to welcome several large emerging market investment firms from the US and various treasury departments from Europe.

Our ICRG political risk scoring changes were significant in April, with over half of the universe of country coverage being adjusted! The fallout from the US tariffs were notably significant as they are beginning to bleed into some countries’ growth projections and expressing themselves in forms of popular discontent.

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. For example, a new published piece in Conflict, Security, and Development, using our data, looked at the connection between wages and internal conflict. What the authors found was that a decrease in real wages significantly increased the risk of internal conflict, especially in countries experiencing elevated levels of conflict. Conversely – and this was the interesting finding – increases in real wages do not consistently reduce conflict, except in scenarios with heightened political violence/terrorism and civil disorder. (https://lnkd.in/euzucUP7)

Additionally, while the weakening in Treasury prices and a softer dollar suggests overseas investors are losing confidence in US assets, there is some good work that fully fleshes out how geopolitical tensions between countries influence the cross-border asset allocation of investment funds.

Using our ICRG data, a recent study from the IMF’s Working Paper series drew a solid connection to the gravity model and geopolitics and why the latter is so important now. (https://lnkd.in/e-JcvkEx)

DID YOU KNOW?

In a recent paper titled ‘Are Bad Government a Threat to Sovereign Defaults? The Effects of Political Risk on Debt Sustainability,’ ICRG was cited as ‘a…statistically significant determinant of sovereign bond yields and growth…’ (https://lnkd.in/ePk2ANEd)

CHRISTOPHER MCKEE, PHD CHIEF EXECUTIVE

Christopher McKee is PRS’ CEO and Owner. An international political economist, global investor, entrepreneur, and author, Chris received his PhD from Queen’s University (Canada) and has been involved in the field of geopolitical risk, limited recourse financing, and private sector development for the past 25 years.