
External macroeconomic risks (also known as financial risks), namely inflation
(§9.1), and interest rate (§9.2) and currency exchange rate movements (§9.3), do
not relate to the project in particular, but to the economic environment in which it
operates. These risks need to be analyzed and mitigated in the same way as the
more direct commercial risks discussed in the previous chapter.
§9.1 INFLATION
Depending on its timing, inflation may be either a risk or a benefit to the Proj-
ect Company.
During the construction period, if inflation leads to higher project costs than
projected, a cost overrun results, with the consequences set out in §8.5.4. Most of