New Zealand's economy is relatively risk-free but its position is getting worse because of declining export prices and high unemployment, commercial analysis company Dun & Bradstreet says.
According to D&B's Global Risk Indicator – which analyses the political, commercial, economic and external risk of doing business in 132 countries – 56 nations have had their risk rating downgraded over the past three years.
Twenty-three had their risk rating upgraded.
New Zealand's risk rating has not been downgraded since 2011, and while it is rated low-risk, its risk profile is getting worse because of declining export prices and unemployment rising to 7.3% late last year.
D&B's New Zealand general manager Lance Crooks says the deteriorating risk profile is concerning, despite good economic conditions locally.
"New Zealand's exposure to world markets means that external developments will have a knock-on effect on the domestic economy.
"In light of the high number of downgrades globally, a full economic recovery from the 2008-09 crisis remains uncertain.
"As such, the possibility of a further downgrade cannot be ruled out," Mr Crooks says.
Nearly half of the total risk downgrades in 2012 were in the struggling eurozone and half of its countries received at least a downgrade last year, including Germany, France, Switzerland, Spain and Greece.
Mr Crooks says for many countries, recovery from the global financial crisis is especially difficult, particularly in volatile eurozone countries.
"Normally, this far into the recovery we would expect the figures to be reversed, with a large number of upgrades and only a few downgrades.
"Given the current track record, it's improbable that the world economy will resume pre-GFC growth levels until at least 2017."
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Green party co-leader James Shaw and Business NZ's John Carnegie go head-to-head on the ETS review
- Cream Trading CEO Kevin O'Sullivan on why dairy companies might want to sign up to the new trading platform
- Paul Brislen on the merits of "cutting off the money" versus Netflix' technical attempts to shut-out unblockers
- Westpac's Dominick Stephens says dairy prices are still a major concern, despite El Niño fears fading
- London School of Economics Professor John Kay discusses financial regulatory shortcomings