Global | Country Risk Report 2026

Summary

US geoeconomic measures, reflecting an increased reliance on trade barriers, sanctions, and industrial policy as tools of strategic competition, together with significant geopolitical events over the last year, have driven a sharp increase in economic policy uncertainty and global risk-aversion measures.

Key points

• Key points:
• Mostly positive rating cycle in Emerging Economies (EE), with a mixed direction in Advanced Economies (AE). Changes have been clearly positive in Peripheral Europe, while other large AE such as the US and France have been downgraded
• Sovereign spreads have continued narrowing or remained stable across the board, extending the previous two years trend.
• In 2025, macroeconomic vulnerabilities kept improving across the board (GDP growth and lower inflation), and even fiscal vulnerabilities like public debt levels seem to be improving in regions like Peripheral Europe where they had stubbornly remained elevated for several years.
• However, there are noticeable exceptions like the US and China, who not only share being the largest economies, but also having elevated and growing levels of public debt, and worrisome fiscal deficits. These two economies, together with France, also have in common concerningly high levels of private leverage and an excess of private debt above what we estimate as their equilibrium levels.
• We are incorporating into our analysis a newly developed measure of geopolitical risk, which differentiates from the most commonly used geopolitical indicators in its structural viewpoint.

Geographies

Topics

Tags