In: Finance
The following are differences between country risk between USA AND JAPAN
Country risk comparison |
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Paramteres |
USA |
JAPAN |
Risk Tier |
USA falls under CRT -1 Tier , signifying that usa has very low country specific risk |
Japan falls under CRT 2 category , signifying Low but significant amount of country risk |
Pillars of country risk |
Economic risk is very Low |
Economic risk in japan is very Low |
Political II |
Political Risk is very Low with a score of around 2. |
Political Risk is Low with a score of around 3. ( Score 1 to 5, where 1 is better and 5 is worst ) |
Financial III |
Financial system risk is very low |
Financial system risk is low |
Inflation based parameters |
Inflation was moderate with 1.8 % considering country specific risk |
Inflation was low at 0.6% signifying lower amount of forex based risk |
GDP based economic growth |
GDP growth parameters were high at 2.7% signifying higher stability in the system |
GDP growth at 0.7% with lower stability in the economic system |
Fiscal and monetary stimulus |
Banks have adopted aggressive stabilization policy in the monetary system in order to further stabilize the risk parameters |
Have adopted fiscal and monetary stimulus in order to stabilize the economic downturn |
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