Now covering 141 developed, emerging, frontier countries and offshore financial centers, ICRG presents monthly political, economic, financial and composite risk ratings and forecasts.
From risks presented by government instability, the threat of asset expropriation, transfer, and payment delays, to forms of internal conflict, terrorism, and corruption, ICRG has been labelled ‘a vital source for managing and advising investment funds that focus on volatile countries, both emerging and developed.’
Monthly updates include 17 tables of economic and financial data affecting metrics most relevant to assessing the risk to commercial assets and related items. From growth, to inflation, to current account and fiscal balances; from external debt/GDP, debt servicing to exports, liquidity and currency stability.
Used by the world’s largest institutional investors, multilateral organizations, transnational firms, central banks, and sovereign wealth funds, ICRG is also the most widely used source of risk data by universities throughout the world.
Traders and portfolio managers, with trillions in assets under management, use ICRG’s ratings and risk metrics to allocate country exposure as the data have been shown to be predictive of equity market returns. Transnational firms and others use ICRG for risk management given its predictive capacity for future risk events. ICRG is a proven early warning system.
Moreover, ICRG is the only political risk methodology and data series to be accepted by the courts in commercial disputes involving the valuation of political risk.
ICRG remains one of a dozen firms, worldwide, to supply Transparency International (TI) with corruption scores that help inform the organization’s annual Corruption Perceptions Index. Our data partnership with TI dates some 20 years.
Purchasing a subscription to ICRG provides access to the current month’s ICRG data, as well as 12-months of back data.
Mid-January is upon us and PRS is off to a roaring start! Given the building tensions in the Middle East and the continuing conflict in Ukraine, it's not surprising that political risk is on the minds of many. Our clients are asking for data, analyses, and especially forecasts. The latter seems particularly apt as a number of new clients have come to us with concerns about supply chain security. Our scenarios and quasi-Type II forecasts are being read at a quickening pace. Having almost 45 years of geopolitical risk data is obviously helpful!
As I mentioned last year, we were in Montreal at the end of 2023. A range of activities were planned, and I must say every time I return to that city I feel a sense of rejuvenation. I think there's something about the civility of Canadian culture (people actually have conversations with each other), the bilingual and bicultural nature of the city and it's history that make it special to me.
There are some plans in the works to spend a little more time in the Laurentians - a place that was my spring break 'home' for many years when I was younger. I began skiing at three (my Dad was a professional football player in his 20s and, as a sports freak, he was always hauling us to the slopes to enjoy the softer snow, the warming sun, and the French Canadian jest for life). I recall fondly the heavy evening snow storms, the chalet fireplace roaring, and watching the Canadiens on a small black and white TV. And after a break of some years (living in Vancouver for over a decade spoils one when it comes to skiing) the plan to return to the sport is now a priority! Rossignol all the way!
Clients and friends should note that PRS' popular Researchers’ Dataset (RDS) series – containing updates from 2023 – is now available. 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 asset prices, inflation and monetary policy, the economic costs of war, youth unemployment and political stability, and much more. Contact us at custserv@prsgroup.com to acquire about acquisition of the RDS updates.
On this score, we continue to receive considerable demand for Table 3Ba of the RDS, which offers a more granular look at the political risk components of the ICRG, supported by 20 years of monthly data. The series works as an excellent complement to the other data bundles announced this year affecting ESG, corruption, and internal/external conflict. Scores of academic studies have been conducted using these series, providing unique insights in asset volatility, government responses to the pandemic, and many more.
All the best for 2024!
The New Year is upon us and all sorts of exciting events are coloring PRS' agenda over the next couple of months.
First, my researchers continue to send me academic scholarship on a daily basis that uses our ICRG data to shed light on various political and economic phenomena.
One recent piece looked at the empirical connection between youth unemployment and political stability in select African countries.
What was found?
Youth unemployment and Inflation and ethnic tensions have a positive relationship with the political instability.2/ When the youth unemployment rate increases by 1%, it leads to political instability by 16%.3/ a 1% increase in government stability decreases political instability by an average of 0.19%There’s quite a lot more in this study, so if time permits have a look at this piece and especially the thorough literature review contained therein.(https://lnkd.in/g72MVEgX)
Also, given that some Fed officials have suggested that rates could remain high 'for some time,' another piece from the Working Paper series of Bank for International Settlements – BIS was instructive.
Using our ICRG financial risk ratings as a proxy for debt sustainability concerns, this study looked at the impact of public debt surprises on inflationexpectations in developed and emerging market economies. It was found that debt surprises raise long term inflation expectations in emerging markets in apersistent way but not in developed ones. The effects are especially pronounced when debt dollarization is already high. By contrast, debt surprises have only modest effects in countries with inflation targeting regimes. https://lnkd.in/eNdsXnw4
We are also continuing to work with one of the world's largest tech companies to develop an AI platform that will serve as an indispensable aid to the raw data that is offered through a subscription to the ICRG and our Country Reports and Economic Forecasts. Offering up such deliverables as the ability to bring forward our risk ratings by about a year with a 85% confidence rate, to a natural language application that will marry the empirical findings of over 40 years of data to simple or complex queries.
Exciting times at PRS!
