Abstract: Economic risk is the risk faced by a business organization or a company that has a foreign branch or investment in a foreign country due to factors such as a change in government policies, a change in government reduction in the credit rating of foreign investment or significant movements in the exchange rates affecting the business of the entity. Doing business and investing money always comes with an element of risk. Economic risks are often the most difficult to foresee. While today the horizon at home or in a specific foreign country may seem clear and promising, dark clouds can rapidly bubble up, thus changing the whole business environment.