Poland with poor level of Social Risk Index: Euler Hermes

As the Covid-19 pandemic pushes the global economy into the worst recession since WWII, systemic social risk could become a more important factor of political risk and worsen the business climate in some countries.

Euler Hermes created the Social Risk Index (SRI) to identify which countries are particularly vulnerable to systemic social risk, including events such as anti-government protests and other incidents that could become game-changers for politics and policymaking, as well as business and investment decisions. The SRI comprises structural determinants that measure underlying strengths, weaknesses and the perceptions of political, institutional and social frameworks for 102 countries, ranking them with a score between 0 (highest risk) and 100 (lowest risk).

Denmark, Finland and Sweden make the top three of the SRI 2020, exhibiting the lowest levels of social risk. Germany is placed 5th and France 9th. Nigeria, Venezuela and Angola exhibit the highest levels of social risk in our sample. Venezuela and Angola have also experienced some of the largest deterioration over the past five years.

Advanced Economies (AEs) are generally less vulnerable to systemic social risk than Emerging Markets (EMs), with Greece (rank 35) and Italy (30th) placed lowest among all AEs. But Poland with rank 33 is just between these two countries.

“Hungary and Poland have experienced a slight increase in social risk over the past five years. This is in line with the fact that democratic institutions have been somewhat weakened in these two countries over the past decade and there have also been public protests against these developments,” Euler Hermes assessed.

(WBJ)