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Mukund Bhide

Connecting Country Risk with growth in GDP?

What is the weightage of growth in GDP to assessment of country risks models.

I do understand that facors like political & economic risk , strategic views on currency and debt developments; systematic macroeconomic forecasts play an important role in this study.
Your views please.
Mukund

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Very little, risk itself can lead to growth.

E.g. "Dubai's real gross domestic product (GDP), which surged to a record Dh198 billion in 2007, is predicted to sustain an average growth rate of 11 per cent for the next eight years." - 29/03/2008.

One must analyse the engine leading this growth in order to determine whether it is sustainable. In some cases, high growth rates may indicate the potential for higher risk.

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that is very correct. political risk include confiscation risk, control risk

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I agree with you, there are loads of other things involved in Political risk.

Business Benchmarking

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Damodaran's country risk premium data and sovereign credit ratings indicate that growth in GDP plays a very minor role in country risk models.

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