Country Risk and the Global Outlook – March 2022

Geopolitical Events Could Trigger Record Fuel Prices


“The US ban on Russian oil, natural gas, and coal combined with UK and EU commitments to reduce their imports in the short-term threaten to push global fuel prices to historic highs. Disrupted trade routes, rising freight costs, inaccessibility of critical raw materials and business disruptions caused by the Russia-Ukraine crisis threaten to derail global economic growth.” said Dr Arun Singh, Global Chief Economist, Dun & Bradstreet.


The immediate ban on US importation of Russian oil, gas and energy, and recently-announced acceleration by the UK and EU to wean themselves off Russian fuel will add to already-high global inflationary pressures in the near term, as alternative suppliers take time to ramp up output. Russia currently accounts for roughly 12% of global oil production and 17% of the world’s natural gas output. Prior to the US ban, natural gas prices were already at risk of hitting multi-year highs with global energy markets tight and OPEC-plus refusing to increase output, making near- to medium-term substitution extremely difficult. Potentially, Qatar, Saudi Arabia, and the UAE could be alternative providers of oil and gas, however, most of these do not have significant capacity to increase supply at short notice, or supplies are already earmarked for trade partners or domestic consumption. European gas storage levels are critically low at less than 30% of capacity exacerbating the situation. The only positive is forecasts of warmer weather, which might ease some pressure on demand. Aside from dampening consumer and business sentiment, politial/insecurity risks could rise in regions which experience high and sustained price increases for food and fuel in coming months.

An added risk to the global outlook is Russia’s currently-unknown response to tightening western sanctions which now target its all-important energy sector. Already, broad-based disruptions from the Russia-Ukraine conflict and severe financial and trade sanctions against Russia have begun to hit the global economy with the ultimate impact yet to be quantified. Businesses from the U.S., Canada, Italy and Australia account for the majority of companies with suppliers in Ukraine and Russia. Of Russia’s 3.5m active businesses, almost 80% are in the services, wholesale trade, finance, insurance, real estate, construction, and retail trade sectors, according to Dun & Bradstreet data. While 80% of the 1.5m active businesses in Ukraine operate in the services, wholesale trade, construction, manufacturing and agriculture sectors, with wholesale trade, manufacturing, and agricultural sectors accounting for over a third of all Ukrainian enterprises. In addition, the removal of Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and other financial and trade sanctions imposed by the US and Western allies pose threats to the viability of some businesses which were already experiencing operational difficulties due to Covid-19 pandemic restrictions affecting both demand and supply, as well as high commodity costs for crude oil, natural gas, and minerals.

Elsewhere, euro-zone consumer prices rose by record 5.8% in February, from 5.1% in January, partly on the back of higher energy prices which rose 31.7% in the month. This underscores the significant upside risks to the region’s near-term inflation outlook resulting from the Russia-Ukraine conflict, given that approximately 41% of Europe’s natural gas supplies come from Russia. Natural gas represents around a quarter of the EU's overall energy consumption - 26% of gas is used in power generation, 23% in industry, with the remainder used for residential heating and services. Thus, rising gas prices and an inability to access sufficient quantities would pose fresh problems for the European Central Bank (ECB) ahead of its March meeting. The ECB’s medium-term inflation target is currently 2%.


North America

The outlook is on ‘deteriorating’ as Russia’s invasion of Ukraine, and ensuing sanctions on Russia, hit trade, commodities, and financial markets, further stressing supply chains. Of the roughly 390 businesses with critical suppliers in Russia, the US is in the top five exposed countries. Canada and US are in the top five with critical Ukrainian suppliers.

Western & Central Europe

The region’s recovery is threatened threatened by the Russia-Ukraine conflict. Omicron tails off amid varying levels of restrictions across European countries. While inflation remains elevated in the UK and the EU, the Bank of England appears more hawkish than the European Central Bank, despite a record surge in inflation in February.

The Nordics

The economic outlook for Nordic countries is ‘deteriorating’ due to high energy and commodity import dependence on Russia which could potentially result in further escalation of already high inflation in the region. Central Banks are set to increase interest rates, a move which could hurt the economic recovery.

Asia Pacific

The outlook is ‘deteriorating’. While domestic restrictions remain low, the risk of healthcare facilities getting overwhelmed persists. A slowing Chinese economy, high oil prices, and portfolio outflows due to the Russia/Ukraine conflict has hit company valuations.

Latin America & Caribbean

The shock to global fuel and food prices will pose new challenges to regional central banks which are combatting already-elevated inflation. Political/instability risks are elevated as consumers’ buying power erodes. Businesses is will face higher financing costs as monetary tightening continues, weighing on already-tepid growth prospects.

Eastern Europe & Central Asia

The outlook for EECA is ‘deteriorating rapidly’ due to Russia’s invasion of Ukraine. Economic uncertainty in Russia and Ukraine are very high due to sanctions on Russia and severe business disruption in both countries. Supply disruption, mounting debt-burden, inflation, and currency volatility are significant risks to the outlook.

Middle East & North Africa

Our outlook for MENA region continues to be at “improving”, because elevated oil prices and healthy demand has led to improved fiscal positions. The highly uncertain energy outlook will keep oil and natural gas prices elevated in the short-term, even if exporters are required to increase supply to offset any shortfall from Russia.

Sub-Saharan Africa

The outlook remains on ‘stable’ but with a downward bias. Sharp upticks of oil and non-oil commodities due to the Russia-Ukraine conflict is a positive for the region. However, there is a significant threat to wheat exports from Russia and Ukraine, which account for nearly 29% of the global supply, potentially threatening the region’s food security.

Dun & Bradstreet Risk Indicator 

Dun & Bradstreet’s Country Risk Indicator provides a comparative, cross-border assessment of the risk of doing business in a country. The risk indicator is divided into seven bands, ranging from DB1 to DB7 – DB1 is lowest risk, DB7 is highest risk. Each band is subdivided into quartiles (a-d), with ‘a’ representing slightly less risk than ‘b’ (and so on). Only the DB7 indicator is not divided into quartiles.

The individual risk indicators denote the following degrees of risk: 

DB1 Lowest Risk Lowest degree of uncertainty associated with expected returns, such as export payments and foreign debt and equity servicing.
DB2 Low Risk Low degree of uncertainty associated with expected returns. However, country-wide factors may result in higher volatility of returns at a future date.
DB3 Slight Risk Enough uncertainty over expected returns to warrant close monitoring of country risk. Customers should actively manage their risk exposures.
DB4 Moderate Risk Significant uncertainty over expected returns. Risk-averse customers are advised to protect against potential losses.
DB5 High Risk Considerable uncertainty associated with expected returns. Businesses are advised to limit their exposure and/or select high-return transactions only.
DB6 Very High Risk Expected returns are subject to large degree of volatility. A very high expected return is required to compensate for the additional risk or the cost of hedging such a risk.
DB7 Highest Risk Returns are almost impossible to predict with any accuracy. Business infrastructure has, in effect broken down.


Ratings and Outlook Changes:

Ratings changes: Changes in rating are made when we judge that there has been a significant alteration in a country’s overall circumstances – this could stem from a one-off event (e.g. a major natural disaster) or from a change in something structural/cyclical (e.g. an important shift in growth prospects). An upgrade indicates a significant change for the better, a downgrade a significant change for the worse. The number of quartiles of change indicates the extent of the improvement/deterioration in circumstances.

Outlook changes: The outlook trend indicates whether we think a country’s next rating change is likely to be a downgrade (‘Deteriorating’ trend) or an upgrade (‘Improving’ trend). A ‘Stable’ outlook trend indicates that we do not currently anticipate a rating change in the near future. 

How Dun & Bradstreet Can Help

Dun & Bradstreet's Country Insight Solutions provide one-stop intelligence for 132 global markets. This solution monitors changes in the business environment of individual countries and forecasts country-wide developments which may affect the level of risk or provide opportunities in the short to medium term. Learn more at

Legal and Copyright Notices 

While the editors endeavour to ensure the accuracy of all information and data contained in this Country Insight Report, neither they nor Dun & Bradstreet accept responsibility for any loss or damage (whether direct or indirect) whatsoever to the customer or any third party resulting or arising therefrom. The recipients of these reports are responsible for determining whether the information contained therein is sufficient for use and shall use their own skill and judgement when choosing to rely upon the reports.

©All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or information storage and retrieval systems without permission of the publisher.