Investor prospects in Portugal, Ireland, Spain and even Greece have brightened this year, but Italy could still put a damper on the recovery.

After a change of administration and the continuity of a four-year IMF package, which includes much-needed reforms and austerity measures, the country seems to be on the right track.

Political turmoil is heightening investor risk and will likely narrow the risk score differential with Japan, but a strong macro-fiscal situation should not be overlooked.

Mexico has climbed two positions in Euromoney’s latest quarter results, ranking 37th out of 186 monitored countries, but the new US presidency has analysts worried.

Investor risk has been rising this year with fears over Brexit, China, the oil price slump, eurozone debts and global conflict weighing heavily on portfolio decision-making. The shock impact of the Republican victory has made the picture even murkier and sent assets into a tailspin.

The October elections did not deliver the shock investors were bracing themselves for when anti-government protests took place earlier in the year – easing the risks and endorsing Iceland’s credentials for a credit rating upgrade based on its improving macro-fiscal profile.

The political chaos, which left the country without a government for 10 months after two election rounds, seems to be finally contained as a new minority government is in the making.