Sri Lanka, June 2 -- Rapid shifts in foreign policy positions and a more bilateral and transactional US foreign policy may contribute to global geopolitical volatility in the next few years, amplifying uncertainty in geostrategic hotspots, says Fitch Ratings.
Geopolitics has become an increasingly relevant risk for global credit, with rising geostrategic competition between the US and China, the Russian invasion of Ukraine and a willingness by the US to break with historical foreign policies on trade, foreign aid and multilateral co-operation.
Elevated geopolitical risk affects issuers through multiple transmission mechanisms. It has, for example, put upward pressure on defence spending, making fiscal consolidation more challenging for ce...