Trade credit insurance company Allianz Trade has maintained South Africa’s risk rating at stable in its latest Country Risk Atlas, as the country’s GDP is expected to continue growing at modest rates of 1.3% this year and 1.5% in 2027, amid improving infrastructure and energy reforms.

Allianz Trade has highlighted the Government of National Unity’s continued support for growth with business-friendly policies, despite internal divisions.

Moreover, it says the South African Reserve Bank’s new inflation target of 3% aims to boost purchasing power; however, there is a risk that debt sustainability could worsen.

The rand has strengthened owing to increased government revenues from gold exports, enhancing reserves, it adds.

However, unemployment, particularly among the youth, remains a major challenge.

South Africa’s removal from the Financial Action Task Force (FATF) grey list signals improved financial regulation, Allianz Trade points out, also noting that geopolitical shifts have increased port traffic, positioning South Africa as a key trade hub.

OTHER FINDINGS

The company has published its third Country Risk Atlas, which assesses the economic outlook, risks and opportunities across 83 countries.

It is based on a proprietary risk ratings model that is updated every quarter with the latest economic developments and Allianz Trade’s proprietary data.

“Our ratings provide comprehensive analysis and insights into the economic, political and business environment, as well as sustainability factors that influence trends in non-payment risk for companies at a macroeconomic level.

“Each rating combines 17 short-term and 18 medium-term indicators and serves decision-makers as a pragmatic compass in a polycrisis world, helping to navigate volatility, protect cash flows and turn risk awareness into a competitive advantage,” Allianz Trade emerging markets senior economist Luca Moneta explains.

Despite a year marked by intense trade tensions and multiple layers of risk (political, geopolitical and fiscal), Allianz Trade finds that global country risks improved this year, with 36 country risk ratings upgraded and 14 downgraded.

This trend underscores the fiscal, monetary and trade-related coping mechanisms that tend to emerge in times of high uncertainty, the company explains.

The 36 economies with improved ratings include Argentina, Ecuador, Hungary, Italy, Spain, Türkiye and Vietnam.

"In 2025, the upgrades were driven primarily by stronger macroeconomic fundamentals, supported by more accommodative fiscal and monetary policies. In several emerging markets, better financing conditions, appreciating local currencies, and higher commodity prices allowed for a rollback of transfer and convertibility restrictions, a key dimension of political risk.

“Among high-income economies, improved political stability, disinflation and stronger trade performance reinforced resilience across Europe (notably Germany, Greece, Italy and Spain) and the Asia-Pacific region (including South Korea and Vietnam),” Allianz Trade economic research head Ana Boata explains.  

However, while the number of downgrades appears low, it has almost tripled compared to 2024 (from five to 14), Allianz Trade says, also noting that some key economies like France, Belgium and the US are part of the list, said to showcase persistent medium-term headwinds for corporates.

“Resilience broadens, but risk clusters persist in important economies. For instance, last year, we saw a deterioration in the medium-term macroeconomic environment in seven markets, compared with 18 that improved.

“However, these deteriorations include Belgium, Brazil, France and the US, which together account for about one-third of global GDP, meaning ten times as much as the economies that saw an improvement,” Allianz Trade CEO Aylin Somersan Coqui points out.

“The global economy is undergoing one of its most turbulent periods in decades, with a convergence of shocks and structural shifts such as AI, demographics, climate change, trade, and regulation. Uncertainty remains elevated, and corporates must go for a selective, country-by-country approach so they can expand their business while safeguarding their assets.

“This underlines the need for granular, forward-looking risk management that goes beyond headline ratings. Continuous monitoring of transfer and convertibility conditions, fiscal trajectories, and trade exposures will be essential to anticipate turning points,” Coqui adds.