Volatile emerging markets top risk for 2013, India at 9th: Eurasia Group
fiscal consolidation would be unlikely this year in that case.
"The best of circumstances, the political context for economic reform might improve following the elections (scheduled for 2014).
"But, at this point, the more likely outcome is that India's policy-making environment becomes even more difficult as the poll is expected to return a more fractious and divided Parliament, generating a weak ruling coalition without the political support for a strong reformist push," it added.
The report said that political risk has come to the fore across the world while dealing with the worst slowdown since the great depression, and "geoeconomics now sits alongside geopolitics in matters of war, peace, and prosperity."
"Whether staring over the fiscal cliff, battling the eurozone crisis, trying to profit from a rising China, or taking cover from the Middle East; around the world, politics has come to dominate market outcomes," it added.
About the top-ranked risk, Eurasia said that emerging market growth in past few years has kept the trade moving, commodities prices afloat, and offered attractive investment opportunities.
"But in a tougher overall growth environment where the US economy looks like a better bet and the potential for explosive risk in the euro-zone goes away, concerns over emerging markets and their future will again receive closer attention.
"Emerging markets will have much more volatility and instability than advanced industrial democracies," it said.
On 'Arab Summer', it said that the wold was talking about an Arab Spring barely more than a year ago.
"Middle East dictators
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