A plain-language definition, real examples, how it differs from political and country risk, why it moves markets, and how researchers measure it from the news.
Geopolitical risk is “the threat, realization, and escalation of adverse events associated with wars, terrorism, and any tensions among states and political actors that affect the peaceful course of international relations” (Caldara and Iacoviello, 2022). It includes both the threat of such events and their realization.
Geopolitical risk is the risk that conflict between countries, armed groups or political actors changes the world in which households, firms and governments make decisions. It is why oil jumps when a strait is threatened, why firms delay investment when a border heats up, and why central banks now track it alongside inflation and growth.
Geopolitical combines geography and politics. It describes how territory, borders, sea lanes, natural resources and military power shape relations between states. A geopolitical event is one where that competition turns into tension or conflict: a war, a blockade, a nuclear standoff, a terrorist campaign that crosses borders. Geopolitics is the study and practice of that competition.
Measurement separates two components. Threats capture the anticipation and escalation of conflict: warnings, demands, mobilisations, ultimatums. Acts capture its realization: fighting, attacks, the use of force. The distinction matters because markets often move more on threats, before anything happens, than on the acts themselves. The African, European and MENA indices on this site each publish a threats-versus-acts split.
| Concept | What it covers | Typical measures |
|---|---|---|
| Geopolitical risk | Wars, terrorism and tensions between states and political actors | News-based GPR indices (Caldara & Iacoviello; GPR Data Hub) |
| Political risk | Policy and instability inside a country: expropriation, regulation, elections, unrest | Expert ratings (e.g. ICRG political risk), firm-level text measures |
| Country risk | The overall risk of doing business in or lending to a country, including economic and financial risk | Country ratings, sovereign spreads, country risk premia |
| Economic uncertainty | How unclear the economic and policy outlook is | Economic Policy Uncertainty (EPU), World Uncertainty Index (WUI) |
For a side-by-side of the main datasets, see geopolitical risk indices compared.
Caldara and Iacoviello (2022) find that higher geopolitical risk foreshadows lower investment and employment and is associated with a higher probability of economic disasters and larger downside risks. Geopolitical risk also moves commodity markets: on this site's MENA data, an Arabic-language oil-risk shock raises the realized volatility of Brent crude for about a month (Iddouch, 2026). For banks, investors and policymakers, the question is less whether geopolitical risk matters than where and when it is rising, which is why country-level, daily data is useful.
Geopolitical risk is not directly observable, so the standard approach reads the news. An index counts, each day, the share of news coverage that reports adverse geopolitical events, then normalizes it so a reference period averages 100. The original GPR index reads ten English-language newspapers from the US, UK and Canada. That vantage point sees much of the world only when its crises reach Western front pages.
The GPR Data Hub builds the same kind of index from the news of the regions themselves: Arabic-language outlets for the Middle East and North Africa, the global GDELT event record for every African and European country since 1979, and local Spanish, Portuguese, Dutch and English-language outlets for South America. The method is set out step by step on the methodology page.
Monthly average, 2016–2024 mean = 100. Data through June 2026. Explore and download.
Monthly average, 2000–2019 mean = 100. Data through June 2026. Explore and download.
Monthly average, 2000–2019 mean = 100. Data through June 2026. Explore and download.
Monthly average, 2016–2024 mean = 100. Data through July 2026. Explore and download.
Country-level series for 122 countries are on the geopolitical risk by country page.
Geopolitical risk is the danger that wars, terrorism, or tensions between states and political actors disrupt the normal course of international relations, and with it trade, investment and markets. It covers both threats (a military build-up, an ultimatum) and acts (an invasion, an attack).
Political risk usually concerns decisions and instability inside one country, such as expropriation, regulation, elections or unrest. Geopolitical risk concerns conflict and tension between states and armed actors, and it can hit countries that are not party to the conflict, for example through oil prices or shipping routes.
The most widely used approach counts how much news coverage is about adverse geopolitical events. The GPR index of Caldara and Iacoviello (2022) uses the share of articles in ten English-language newspapers. The GPR Data Hub applies the same idea to news from inside each region: Arabic-language outlets for MENA, the global GDELT event record for Africa and Europe, and local outlets for South America.
A geopolitical risk index is a time series that tracks the intensity of geopolitical risk, usually from news text. A value of 100 marks the average of a reference period, so 150 means risk coverage 50% above normal.
The GPR Data Hub publishes daily geopolitical risk indices for the MENA region, Africa (54 countries), Europe (40 countries) and South America (12 countries) as free CSV files under CC BY 4.0. The original global GPR index is free from Matteo Iacoviello's website.
Geopolitical describes the way geography, power and politics interact between countries: who controls territory, borders, sea lanes and resources, and how states compete or cooperate over them.