The southern African country’s reliance on copper and recent disorderly elections have seen increased instability in the region, potentially adding to the deterioration in its ECR scores.

There is no need to panic, but the government’s new budget strategy puts the fiscal consolidation plans out of kilter and is signalling there might be trouble ahead.

A cyclical recovery is under way yet huge fiscal problems remain, and whether progress is sustained depends on structural reforms, risk experts caution.

While the focus has been on how Italy must resolve its banking sector problems, investors should also be keeping an eye on the risks lurking elsewhere in Europe.

Uncertainty is increasing for peso assets as the fight for the White House heats up. Even a victory for Hillary Clinton comes with reservations attached, demonstrating how it is not just the possibility of Donald Trump winning that is ringing alarm bells.

The Italian banking sector suffered a spanking in the European Banking Authority’s stress tests last week, but the banking system is not the only issue for the sovereign. Italy’s risk score could drop further this year if the government does not gain a mandate to carry out much-needed reforms.