EM Europe and CIS: Select Country Risk Ratings

Belarus (BLR)

Belarus’ overall risk score is high. The political violence and political interference risks remain medium-high while legal and regulatory risk stands at very high due to concerns regarding political oppression in the country. In this rating period, supply chain disruption increased from medium-high to high due to the ongoing war in Ukraine and worsened relations with the EU and neighbouring countries. The country held parliamentary and local elections in January 2025, and president Lukashenko received 87% of the vote amid accusations that the vote was neither free nor fair. Legal proceedings continue to be initiated against researchers, politicians and journalists due to alleged ongoing political oppression as a climate of heightened political tension remains in the country. Linked with this, the risk of doing business, inability of government to provide stimulus remained at medium-high while exchange transfers risks surged from medium-high to high risk category in this rating period. The country remains closely connected to Russia economically, politically and militarily. According to sources, roughly two thousand Russian military personnel remain in Belarus as of 2025, including air defence units and aerospace forces while Russian operations continue from key locations, such as the Mazyr (Bokau) and Ziabrauka airfields. Due to Russian influence, the Belarussian economy continues to be negatively impacted by the Ukraine-Russia war and sanctions. In addition to this, the economy is struggling due to worsening ties with the EU and Western societies hampering foreign investments and economic confidence. Annual inflation rate in Belarus stood elevated at 6.9% in October due to lingering food and services prices. Price and wage volatility remain strong which can be attributed to international sanctions. The National Bank of the Republic of Belarus (NBRB) is trying to reduce dollarization, for instance by increasing banks' mandatory reserves of foreign currency.  However, low confidence in the Belarusian ruble, failures in financial regulation and supervision, and high level of political risk continue to impede such efforts causing sovereign non-payment risk rating at medium level. In this rating period, the inability of the government to provide stimulus increased from medium-high to high demonstrating weakening fiscal stance due to sanctions and adverse geopolitical events. Despite reliance on trade with Russia increase exposure to external shocks; strong trade, economic and investment cooperation between Belarus and China, which gained momentum after bilateral agreement on trade in services and investment was signed, continues to contribute to Belarussian economy. (Note: According to a piece by Atlantic Council, up to 70% of Belarus’s exports flow to Russia as of November 2025).

Kazakhstan (KAZ)

Kazakhstan’s overall risk score remains medium-high. The political interference and legal and regulatory risk levels are at medium-high despite the political risk decreasing from medium-high to medium in this rating period. The country continues to be an autocratic state with elevated unemployment and corruption. Even though the country is appearing to distance itself from Russia due to the war in Ukraine, Kazakhstan’s continued trade and FDI interdependence to Russia means the economy is still exposed to domestic movements in Russia, war in Ukraine and global oil prices causing supply chain disruption to stay at medium level. (Note: On November 12, Russian leader Putin and Kazakh President Tokayev signed a declaration on strategic partnership and alliance, strengthening cooperation between Moscow and Astana across energy, security, and trade, demonstrating continued relationship with Russia). When it comes to domestic politics, president Tokayev remains powerful despite some concerns on the rule of law and women’s empowerment. Geopolitical uncertainties, sanctions over Russia economy and Ukraine war cause the risk of doing business in Kazakhstan to remain at medium level in this rating period. The underlying economy momentum is good, as the government tries to maintain growth momentum and fight against the elevated inflation. Kazakhstan's economy expanded by 6.3% y/y in January-September 2025, the strongest since 2011, primarily fuelled by growing transport and trade sectors. The annual inflation rate eased to 12.6% in October 2025, down from a three-month high of 12.9% in September. The government is trying to fight against corruption and money laundering as it approved a comprehensive set of measures in November aimed at reducing the risks of money laundering, terrorist financing, and the proliferation of weapons of mass destruction, which entered into force as of November 20. Despite high corruption, political concerns, and adverse global developments, the banking sector vulnerability is at medium-low level while the banking sector has systemic deficiencies that ensure poor scores for corruption and state intervention, financial regulation and supervision. Tied with this, the exchange transfer risk is at medium high. Elsewhere, sovereign non-payment risk remains at medium considering a fairly low public debt/GDP ratio (around 23% of GDP). Kazakhstan's large financing requirements, dependence on oil and other commodities and limited technological diffusion hampers the competitiveness of small enterprises, igniting economic vulnerabilities to stay strong.

Russia (RUS)

Russia’s overall risk rating remains medium-high when compared to the previous risk analysis period. The war in Ukraine continues to dominate Russian politics and economy. Despite moderately falling seven straight months, helped by lagged impacts of previous aggressive monetary tightening and relative resilience of RUB, inflation remained elevated at 7.7% y/y as of October, which was well above the Central Bank of Russia’s (CBR) midterm target of 4%. Labour is still constrained and investment levels are low due to a weak business climate. Sanctions, supply side constraints, and stubborn price pressures continue to hamper foreign investments and economic confidence. The overall environment for doing business in and with Russia remains unfavourable, at medium level in this rating period. Political violence is at a very high rating and political interference risk is high due to concerns regarding political oppression in the country. The legal and regulatory risk remains high, and sovereign non-payment risk is medium-high as the war in Ukraine continues to cause a domestic strain, creating an increasing financial burden given high military spending and fiscal support. Due to international sanctions, there are heightened transfer and convertibility risks while exchange transfer risk is at medium. Russia's GDP expanded by 0.6% y/y in Q3, the slowest pace of growth since Q1 2023 showing the economic slowdown in Russia is more evident now. Another constraint on the GDP growth is the new set of U.S. sanctions on Lukoil and Rosneft, which came into force on November 21, will likely cause a fall in Russian oil exports. Despite macroeconomic problems and investors’ negative perceptions, Russia's overall public debt burden remains moderate. Banking sector vulnerability is at medium-low as banks remain partly profitable, taking into account that the government continues to support large banks despite non-performing loans increasing. In this rating period, the inability of the government to provide stimulus increased from medium-low level to medium, showing that some financial constraints remain strong. We believe a peace deal in Ukraine is the real key to ease pressure on inflation and alleviate demand-supply imbalances in Russia despite sealing a full-scale peace deal in Ukraine is unlikely in the short term. The war will be a major determinant for the Russian economy and politics in 2026.

Serbia (SRB)

Serbia’s overall risk remains medium. Political violence has also been assessed as medium. President Aleksandar Vučić, the founding member of the Serbian Progressive Party (SNS), has served in his presidential role since 2017. Vučić’s and his ruling SNS party have been on the receiving end of violent anti-government protests recently.  Prior to August 13th, a majority of protests were peaceful with limited casualties. Protesters are calling for elections to oust Vučić and his party from parliament, as they believe that the tragic collapse of a roof on a renovated railway station, which caused the unfortunate deaths of 16 people, was the result of internal corruption. In mid-September, former construction, infrastructure and transport minister Goran Vesić was indicted by a Serbian prosecutor alongside 12 others following the collapse of the supposedly renovated railway station. In addition, political interference is medium, while legal & regulatory risk is assessed at medium high. In January 2025, the U.S. had voiced its concern about the Serbian oil company NIS, Serbia’s largest importer of oil and one of Russia’s last energy assets within Europe, due to Gazprom Neft’s majority ownership. However, sanctions have only come into effect since 9th October 2025. In the light of this situation the EU has invited Serbia to the bloc’s communal gas-buying initiative, to align Serbia with Europe’s energy policy as the country receives approximately 80% of its natural gas from Russia.

According to the IMF, GDP growth is forecast to reach 2.4% in 2025 and then a positive shift to 3.6% in 2026. Agriculture is the third largest sector for Serbia, contributing as a very significant employer. However, droughts have caused major disruption for livestock and crops in the summer of 2024, but even more recently in a prolonged drought in August 2025. Supply chain disruption though remains medium with Serbia’s south-eastern position in Europe creating gateways for global trade and relations, while the risk of doing business remains medium-low. Inflation has eased, declining from a peak of around 16% in 2023. According to the IMF, inflation is forecast to be 4.7% in 2025 and is projected to ease further to 3.1% in 2026. The policy rate however, has not seen an alteration since January 2025 and was held at 5.75% at the October 2025 meeting due to ongoing uncertainties. Public debt is set to continue its steady path with a forecast of 43.9% in 2025, while the IMF project a rate of 44.2% in 2026. However, approximately 70% of this debt is in foreign currencies, especially in the euro. Exchange transfer risk has remained medium low, as sovereign non-payment risk continues to be assessed as medium.

Turkiye (TUR)

Turkiye’s overall risk level is high. The political violence in the country remains very high, particularly after Istanbul mayor and opposition’s presidential candidate, Ekrem Imamoglu was arrested late March due to fraud, bribery and bid-rigging allegations, which was followed by nationwide protests against the Justice and Development Party (AKP) government in Q2. The mayors of two other major cities in southern Turkiye (Adana and Antalya) were also arrested on July 5, joining a growing list of opposition figures and journalists detained in 2025. A government-controlled trustee was appointed by the government to run pro-opposition television network TELE1 late October reignited the concerns. (Note: Turkish prosecutors have filed a nearly 4,000-page indictment against Imamoglu accusing him of being the head of a criminal organization requesting a sentence of over 2,400 years in November, which has been described by the opposition as politically motivated). Owing to growing political tensions, political interference remains at a medium-high level, while legal & regulatory risk also stands at medium-high. Despite there being some recent signs of economic recovery, mentioned adverse political developments continue to risk ongoing disinflationary process adding uncertainty to fragile investment environment. The risk of doing business stands at a medium level due to concerns over law enforcement and political oppression. Despite problems, both the inability of the government to provide stimulus and sovereign non-payment risks decreased from medium-high to medium level in this rating period, partly demonstrating that the economy is recuperating and financial constraints are partly relieved. The banking sector vulnerability is currently at medium-low level, showing the relative strength of the banking system supported by Turkiye’s removal from the Financial Action Task Force (FATF) grey list though the banking sector is exposed to Turkiye's heavily indebted private sector despite still manageable. Remaining the core economic problem, inflation moderately softened to around 32.9% y/y in October from 33.3% in September while upside-tilted inflation risks continued limiting the downward trend such as sticky food and services prices, which will likely require the central bank to maintain a tight stance for a longer period than expected and slowdown the easing cycle. We think there are still low foreign-exchange reserves relative to external short-term debt, while a large gross external financing requirement and vulnerability to external shocks exist. Elsewhere, the supply chain disruption risk remains at a high level restraining the country’s overall trade due to the conflicts in Ukraine and Gaza.

Turkmenistan (TKM)

Overall risk in Turkmenistan continues to be considered as high. President Serdar Berdimuhamedow succeeded his father in the March 2022 election, an election is next scheduled for 2028. Political interference and legal & regulatory risk both remain very high, as the land locked nation’s multi-party system has allowed President Berdimuhamedow to rule with little to no political opposition and maintain strict control over all aspects of Turkmenistan. The risk of doing business continues to be considered very high. Fundamental rights are also restricted. Economic ties have continued to improve between Turkmenistan and China, with China accounting for 64% of the country’s exported goods as its largest trading partner. Additionally, Japanese company Mitsubishi has started its construction on a urea plant on the Caspian Sea’s coast, estimated to cost over USB 1.3 bln, enabling the plant to produce upwards of 3,500 tons of urea and 2,000 tons of ammonia a day. Diversification is the main aim of this project, reducing dependence on Turkmenistan’s key gas exports. According to the IMF, GDP growth is forecast to remain stable at 2.3% in 2025 and 2026. Turkmenistan’s hydrocarbon sector, particularly oil and natural gas, uphold growth despite the slowdown in the Chinese economy, as still relatively high oil and gas prices continue to provide substantial export revenue. In addition to diversification through Mitsubishi’s project, Turkmenistan is seeking to reduce its dependence on China via the Tapi project. The Tapi project plans natural gas transport from Turkmenistan’s Galkynysh gas field via large scale pipelines to Pakistan, India and to Europe. However, completion has been postponed till the end of the decade due to security concerns. Alongside the non-hydrocarbon sector, public investment is also aimed to be directed into infrastructure. Therefore, the government’s inability to provide stimulus remains medium. Government debt to GDP remains low and stable, according to the IMF’s projected rate of 3.9% in 2025, due to the small amount of debt being held by domestic creditors. Additionally, inflation is expected to reach 3.9% in 2025, though is expected to rise over the coming years due to a 10% annual rise in public sector wages and pensions. Sovereign non-payment risk is currently assessed as medium, while exchange transfer risk remains high due to the government’s tight controls on foreign currency, which have created a gap in the official exchange rate and parallel market exchange rate.

Ukraine (UKR)

Ukraine’s overall risk rating remains high. The high risk rating originates from a very high risk rating in political violence; and high legal & regulatory, and supply chain disruption risks. The inability of the government to provide stimulus, along with sovereign non-payment and exchange transfer risks, remains high, demonstrating a serious financial bottleneck and economic stress. The war’s adverse impacts continue to shape the economic and political stance of the country since the war devastated the country, with serious damage having already inflicted on the country’s infrastructure. The country is still under martial law since the beginning of the war, which is criticized by the opposition in Ukraine and the U.S. president Trump. (Note: The presidential election in Ukraine was supposed to be held in 2024, but no elections were held due to martial law). Meanwhile, political interference continues to pose a medium-high risk in this rating period, closely linked with the ongoing situation in Ukraine. The political and economic outlooks remain exceptionally uncertain due to massive human and economic damage, coupled with labour shortages and Russia’s continued attacks on Ukrainian energy supply and infrastructure. Logistical and manufacturing problems linked with supply chain disruptions are slowing economic activity, which has caused the risk of doing business to stand at medium-level in this rating period. Government debt to GDP nearly doubled in the last four years due to high military spending and fiscal support to soldiers and their families. Despite significant constraints, Ukrainian economy is not doing very bad so far in 2025 depend the economy partly depends on foreign support and grants. The annual inflation rate fell to a one-year low of 10.9% in October, from 11.9% in September. The banking sector’s vulnerability is at medium-low, highlighting the relative strength of the banking system. On the war end, it appears a full-scale peace deal satisfying all parties will be hard to achieve in the near term without Ukraine abandoning hopes of returning to its pre-war borders and joining NATO as Russia continues to push for its pre-war requests. Even if a full-scale deal is achieved, the country will need many years to rebuild its war-torn economy, stabilize politically and strengthen militarily again. Ukraine’s domestic politics and economy will continue to be shaped by the war and peace negotiations in 2026.

Uzbekistan (UZB)

Uzbekistan’s overall risk continues to be assessed as medium high. President Shavkat Mirziyoyev has led the Central Asian state since 2016, following his re-election in 2023 with 87.1% of the overall vote. This extends his tenure in office until 2030, following the extension of the presidential term to 7 years. President Mirziyoyev has used policies to lift many trade barriers that prohibit the landlocked country, while also courting foreign investment. Political interference and legal & regulatory risk have remained medium high and very high. In early November, Trump stated that the United States and Uzbekistan had reached a trade and economic deal worth billions. The agreement states that Uzbekistan plans to invest USD35 bln in next 3 years into key American sectors, including minerals, aviation, infrastructure, technology, agriculture, while expecting more than USD100 bln to be invested in the next 10 years. This deal was confirmed ahead of the C5+1 Summit, including both parties in the deal. However, Uzbekistan remains close partners with both China and Russia. In particular, commitment was re-affirmed between President Putin and President Mirziyoyev in October 2025 to strengthen allied relation and the discussion of investment into their energy sectors. In terms of the Ukraine-Russia conflict, Ukraine President Zelensky had reported how his troops were fighting foreign ‘mercenaries’ from multiple other nations. Uzbekistan was one of the multiple other central Asian countries supporting Russian forces. Therefore, political violence continues to be considered as medium high.

In terms of the Uzbek economy, GDP growth is forecast by the IMF to reach 6.8% in 2025, while IMF expectation predicts growth to reduce slightly to 6% in 2026. Uzbekistan expects to attract over USD 1 bln in foreign investment in AI and digital infrastructure by 2030 through the setup of a tax-free zone for AI and data centre projects in Karakalpakstan, west of Uzbekistan. The tax-free zone will benefit foreign firms willing to invest USD 100 mln, offering a full tax exemption until 2040. The Karakalpakstan region however, is known as one the country’s poorest areas with no known date for when the government will commence the building of infrastructure for the tax-free zone. The risk of doing business remains medium high, while the inability of government to provide stimulus is still considered as medium risk. Inflationary pressures are reducing slightly with the country’s 5% target now estimated for 2027, with inflation in 2025 forecast at 9.1% by the IMF. The Central Bank of Uzbekistan has remained firm with its 14% policy rate in October to maintain tight monetary conditions. Government debt currently is forecasted at 31.1% of GDP in 2025 and, estimated to remain stable in 2026 with a prediction of 31% in 2026. Exchange transfer and sovereign non-payment risk both remain at medium high and medium, while banking sector vulnerability has improved to a rating of medium low.

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