Political Risk

Political risk refers to the potential for a country's political decisions, instability, or events—such as changes in government, policies, or conflicts—to negatively impact investments or business operations. It can lead to financial losses, disruption of projects, or changes in market conditions. This risk is important for investors and companies to consider, as political shifts can alter the business environment unpredictably, affecting long-term plans and profitability. Essentially, political risk captures how the political landscape of a country can influence economic stability and investment outcomes.