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Oil price hardly matters for Russian country risk

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Staff Writer | November 3, 2016
The risk of doing business in Russia has not changed substantially and there is no evidence that the oil price decline had a significant impact on Russian country risk.
Oil price
Doing business   Changes in the business environment
This is the conclusion reached by Atradius' study "Oil price hardly matters for Russian country risk", recently published by Atradius.

The recently published study examines the correlation between the oil price and Russia's score on Euromoney Country Risk (ECR).

Country risk grasps the probability that changes in the business environment of a country adversely impact operations or payment for imports, resulting in a financial loss.

For the purposes of the study, Atradius has collected and analysed Euromoney data over the period 2011Q1-2016Q1.

As expected, the outcome of the correlation analysis found a significant positive relationship between the oil price and the economic aspects of the country risk measure.

However, no such significant relationship was found for the political and structural aspects of the country risk.

This means that the oil price decline is only of limited relevance for the Russian country risk, as the stability of the country's political institutions has mitigated the negative impact of the oil price decline on the economy of Russia.

As a consequence, the Russian business environment has remained fairly stable, and the risk of doing business in the country has not been significantly affected.