Risk factor

Economical risk
1. Increasing prices for raw materials and energy. 
Increase in prices of raw materials will increase the cost of products. If product prices cannot
be raised due to competitive market, the raise of costs will result in reduce of profit.
2. Production prices reduction. 
Decrease in market of product can cause decrease in profitability. This will not produce
adequate revenues for covering operating costs and repaying the debt obligations.
3. Higher taxes and duties rates.
The rise in existing taxes rates or introducing of new taxes leads to decrease in profits. The
implementation of new export and import duties can also be related to economic risks.New
export or import duties can affect activities involving export or import.
4. High interest rate
High interest rate will result in economic growth tend to be slower.
5. foreign currency exchange risk,
Interest rate risk. Increasing in interest rates on loans can give negative effect impact on
financial performance.
6. delays of the project
The delay in completing plant construction will increase operational costs and will lead to
high expenses.

References

Bazil, M. (n.d.). Mr. Bazil. Retrieved November 17, 2020, from

https://finbenefit.com/economic-risk-definition.html

What is economic risk? Definition and example. (2020, November 26). Retrieved November
20, 2020, from https://marketbusinessnews.com/financial-glossary/economic-risk/

Pettinger, T. (2019, November 25). Effect of raising interest rates. Retrieved November 27,
2020, from https://www.economicshelp.org/macroeconomics/monetary-policy/effect-
raising-interest-rates/