Dun & Bradstreet’s Global Risk Matrix Report identifies the top ten risks facing the global business environment by assessing the likelihood of certain events occurring, and their probable impact on the economy. The improved outlook or minimized risks around the world was due to a drop in the likelihood of three critical events. The first is the negative impact on global financial markets as the US Federal Reserve normalises interest rates and unwinds its balance sheet. The second is a jump in the strength of the US dollar creating turmoil in global trade and capital flows. The last event, is the receding risk of the wars in Iraq and Syria spilling over into neighbouring countries.
Dun & Bradstreet’s analysis shows that these gains were partially offset by some new risks entering the top ten, namely the increase in the European Central Bank’s quantitative easing (QE) program adding renewed volatility to global financial markets, rising terrorist attacks in developed countries and in the Middle East and North Africa (MENA) region impacting business continuity and security, and a severe El-Nino reducing trade flows.
“Organizations are doing a better job of preparing for potential changes in US monetary policy and currency strengthening, creating an overall improvement in the business risk environment,” said Dr. Warwick Knowles, deputy chief economist, Dun & Bradstreet. Knowles added, “Yet despite these gains, the very real threat of terrorist attacks has now risen to a level that requires businesses in vulnerable areas to have contingency plans.”
Global Business Impact Score
*The GBI score is based on: 1) the probability of the global risk occurring; multiplied by 2) the magnitude of that event on the global business environment scored from 0 to a maximum of 100. The Global Business Risk Index is the sum of the 10 GBI scores. The full Global Risk Matrix for Q4 2015 can be downloaded from: http://www.dnb.co.uk/resources/global-matrix-q4-report.
Source: Dun & Bradstreet