Sace 2022 risk map: the black swan of the war in Ukraine
Italy: how the Sace 2022 risk map changes with the Russia-Ukraine war
What emerges from the new Sace risk map for Italy
Uncertainty is investment's number one enemy. "The heavy military escalation and the heavy sanctions imposed by various countries on Russia raise the credit risk that is the risk of non-payment which, on average, in Russia goes from 62 to 70 , on a score from 0 to 100. Worse it is for political risks , which for Russia ranges from 51 to 76, where the risk of restrictions and transfer of currency convertibility increases. In economic terms this means that the Russian Central Bank has raised interest rates, the ruble has devalued by 50%, it is difficult to think that the Russian economy will not go into recession. The first estimates speak of a -3% in this year in a context of oil and gas prices that remain high in his favor. In 2023 it could return to recovery but it will not be decisive ". Alessandro Terzulli, chief economist of Sace, made this examination during the presentation of the SACE 2022 risk map which this year is entitled “ Risks (in) usual for unusual times: the world in 2022”.
Political instabilities between Russia and Ukraine
The negative economic effects of the war between Russia and Ukraine will also be felt in the countries of the euro area. “The impact will also be on the euro area, we will have a slowdown in growth that we expected vigorously for this year but growth in the euro area and in Italy will remain – continues Terzulli -. To date, it is difficult to think of a worsening of the recovery that was solid in 2021 ”.
The transmission channels of the Ukrainian crisis in Italy and Europe
There are several channels through which Russia's political instabilities will move to Italy and Europe. The first place is occupied by the sale of energy goods with “the price of natural gas on the TTF in Amsterdam at 116 euros per cubic meter”. We also have the trade channel. Despite a solid fiscal and currency reserve framework, sanctions imposed by many countries on Russia hinder payments in foreign trade relations, consequently impacting the credit risk of Russia's public and private counterparties. In 2021, Italy exported 7.7 billion worth of goods to Russia "we are still 10.7 billion in 2013 away". Nor should exports to Ukraine "grow by 25% to 2.2 billion" and the export of services, in particular tourism, be underestimated. "In 2019 we had 5.8 million Russian presences in Italy with an average daily attendance ticket of 1000 euros, an increase of 8% – continues Terzulli -. The Italian companies operating in Russia will also be affected by the recession, about 750, but nothing catastrophic ".
The impacts on the Ukrainian economy according to the Risk Map
Ukraine is obviously paying for Russia's military intervention. "The real impacts on the economy are not clearly known, since this is an event currently underway and in continuous and sudden evolution, but it is not difficult to imagine that even in the presence of a rapid resolution of the conflict, the counterparties in the country will be more in difficulty. to honor its debts – reads the Focus On Risk Map 2022 – Risks (in) usual for unusual times: the world in 2022 elaborated by the SACE Research Department -. In partial mitigation of this aspect, the international financial support in favor of Kiev must be considered ”.
The risks associated with sanctions
The sanctions inflicted on Russia, and the possible responses of the Kremlin , cannot fail to have an impact on the Russian economy. “In particular, the increase in transfer risk is due to the availability of the country, which could further exacerbate following the exclusion of the Russian financial system from the Swift channel – the report states -. In addition, the recent adoption by the Russian side of control measures on capital movements in foreign currencies weighs on the convertibility risk ”.
The risks of expropriation
Russia's reaction to the sanctions could be a lot of violence, including in economic terms. “Likewise, the risk of expropriation increases in the wake of any possible retaliation against international investors for the sanctions imposed on Moscow, resulting in confiscation actions, without adequate compensation, or in events of creeping expropriation ”, finally reads the SACE report.
The black swans, numerous and frequent
"We got used to considering a world in which vast areas of the planet were politically quite stable , where the laws of economics far prevailed over those of politics and suddenly we have to review everything." Federico Rampini, Repubblica correspondent in the USA, introduces the theme of the "black swan" in the new geography of global risks. “The first image that comes to mind when observing the European continent is Taleb's black swan . A statistically highly unlikely event that if it occurs has a huge, disruptive effect. We must ask ourselves why there are so many black swans, after 2008 we had Brexit , the election of Trump, the pandemic and now a war of the twentieth century . Style that plunges us into a scenario that we considered incredible ". Before the war, the greatest fears concerned the growth of inflation "which, leading to an increase in interest rates that originated in the United States and moved to Europe, brings to the fore the fragility of countries with high public debt such as the 'Italy “. These classic themes are accompanied by the energy risk. "Americans are discovering how vulnerable Europe is to energy, Italy is proportionally more dependent on Russian supplies than Germany," adds Rampini.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/primo-piano/mappa-dei-rischi-sace-2022-il-cigno-nero-della-guerra-in-ucraina/ on Thu, 03 Mar 2022 15:18:43 +0000.