Multinational corporations are expected to conduct rigorous country risk analyse

Question

Multinational corporations are expected to conduct rigorous country risk analyses for their international investments. Prepare a report to evaluate the country risk of Germany. In general, country risk analysis consists of two parts: political and financial risk factors. Investigate these factors and assign a value on them from 1 to 5 (5 being the lowest risk) to calculate political and financial risk assessments separately. An equally-weighted average of political and financial risk numbers will give you an overall assessment of the country risk. In a couple paragraphs Describe results

Political Risk Characteristics:

attitude of consumers in the host country

actions of host government

blockage of fund transfers

currency inconvertibility

war

inefficient bureaucracy

corruption

Financial Risk Characteristics:

economic growth

interest rates

exchange rates

trade deficit (surplus)

inflation

fiscal policy

competitiveness

Explanation / Answer

Germany

Political risk very low-

• Germany is an individual from the EU and one of the first 11 nations to embrace the euro as its cash in 1999.

• Thanks to its expanding economy and solid foundations, the nation holds impressive impact both in the worldwide group and in the European Union.

• Elections will be held in September, with officeholder Chancellor Angela Merkel running basically against Martin Schulz, an individual from the Social Democratic Party. Merkel was supported in the surveys as of August 2017. Moreover, bolster for the Alternative for Germany party, which picked up ubiquity in the midst of the displaced person emergency, has dropped to single digits as indicated by surveys.

• Concerns over migration and the displaced person emergency hold on however have slowed down. The legislature acquainted authoritative measures with decrease Germany's allure as a goal for foreigners.

So on that basis I will rank Germany on political aspect at 4.

Financial risk very low-

• The German protection division is directed by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). Supervision of the business goes back to the turn of the twentieth century.

• With productivity measurements still low, the IMF has prescribed that the managing an account and extra security segments quick track their rebuilding designs.

• Inflation development has been directed, on account of the European Central Bank's accommodative money related strategy.

• Housing costs in a few zones have ascended lately. Accordingly, the legislature has expanded its social lodging subsidizing and gave more reasonable lodging alternatives.

I will rank Germany on financial risk category at 4.

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