Assessing macroeconomic risks is very critical for sustaining the business in this volatile and uncertain global and domestic economic environment. Identifying, quantifying, assessing, monitoring macro-economic risks is very complex, and need extensive knowledge of inter- relationships and also tracking number of variables and understanding the impacts. Most of the research papers, or tools used by the rating agencies do not holistically analyze the macroeconomic risks and take them as a small part of the scoring/rating models. It has been less understood or left it to economists to give forecasts on vital variables and take such forecasts as sacrosanct. Fund management, treasury management, business strategy, Pricing strategies, investment and expansion of business to related fields requires deep understanding of macroeconomic risks.
This simple tool will help companies/fund managers/researchers/analysts/policy makers by themselves to easily capture the macroeconomic risks. Various risks have been categorized into five buckets namely, growth outlook, interest rate, fiscal, Trade and global factors. Each of these five buckets will have sub-factors that can be quantified and capture risk associated with it. Scoring model will throw the extent of total risk and category-wise risk score so that it becomes a crucial input in decision making.
