Depth of Country risk data
(This image illustrates the
data in the country risk index) |
About Euromoney's Country risk ratings
Country risk survey monitoring political and economic stability of countries around the globe.
Euromoney Country Risk evaluates the investment risk of a country, such as risk of default on a bond, risk of losing direct investment, risk to global business relations etc, by taking a qualitative model, which seeks an expert opinion on risk variables within a country (70% weighting) and combining it with three basic quantitative values (30% weighting).
Factors included in the ranking of countries by risk:
Political risk
Economic performance/projections
Structural assessment
Debt indicators
Credit Ratings
Access to bank finance
Access to capital markets
Find out more about Euromoney Country Risk
List of countries ranked
Methodology:
Combined Euromoney Country Risk score
To obtain the overall ECR country risk score, Euromoney assigns a weighting to six categories. The three qualitative expert opinions are political risk (30% weighting), economic performance (30%), and structural assessment (10%). The three quantitative values are debt indicators (10%), credit ratings (10%), access to bank finance/capital markets (10%).
• The qualitative average
The qualitative average is produced by combining evaluations of political, economic, and structural assessments from experts around the world.
When applying political, economic, and structural assessments to a 100 point scale for the qualitative average only (rather than the full Euromoney Country Risk score), the following weighting is used: political 43%, economic 43%, and structural 14%.
Qualitative assessments
Economic risk: participants rate each country for which they have knowledge from 0-10 across 6 sub factors to equal a score out of 100. The categories of economic risk scored are as follows: bank stability/ risk; GNP outlook; unemployment rate; government finances; monetary policy/ currency stability.
Political risk: participants rate each country for which they have knowledge from 0-10 across 5 sub factors to equal a score out of 100. The categories of political risk scored are as follows: corruption; government non-payments/ non-repatriation; government stability; information access/ transparency; institutional risk; regulatory and policy environment.
Structural risk: participants rate each country for which they have knowledge from 0-10 across 4 sub factors to equal a score out of 100. The categories of structural risk scored are as follows: demographics; hard infrastructure; labour market/ industrial relations; soft infrastructure.
Individual experts must apply a value to each sub factor before their score is accepted into the system.
Individual experts can also modify the sub factor weights to modify their effect on the overall score of 100. The weight of an individual sub factor can be lowered to a minimum of 10% and to a maximum of 30%. This allows the system to capture a second attribute along side of the evaluation of that category, which is the estimated effect of the category. For instance, a user may make a judgement that the single most important issue facing a given country is maintaining the stability of its currency, and so decide to increase the weighting of the monetary policy/ currency stability category from 20% to 30%.
Within each sub factor, ECR also asks experts for further information on the reasons behind each individual score, and these fall under the category of related factors. These are more like poll points, and do not directly affect the score. Instead, they inform a change made to a sub factor score and weight. For example, within the economic risk category of bank stability lie four further related factors: regulatory risk, trading exposures, asset quality and undercapitalisation. Individual experts are able to add more related factors and ignore ones which are not applicable.
The quantitative score factors
• Access to bank finance/capital markets: participants rate each country's accessibility to international markets on a scale of 0-10 (0=no access at all and 10=full access). These scores are averaged and then weighted to 10%.
• Debt indicators: calculated using the folloiwng ratios from the World Bank's Global Development Finance figures: total debt stocks to GNP (A), debt service to exports (B); current account balance to GNP (C). Developing countries which do not report complete debt data get a score of zero.
• Credit ratings: nominal values are assigned to sovereign ratings from Moody's, Standard & Poor’s and Fitch IBCA. The ratings are converted into a score using a set scoring chart. This score is then averaged and the score weighted to 10%. The higher the average value the better.
Where there is no rating, countries score zero.
For full methodology and scoring guidelines, visit www.euromoneycountryrisk.com/Methodology.aspx.
For more information contact Andrew Mortimer, Deputy Editor - Euromoney Country Risk (ECR) +44 (0) 20 7779 8287, amortimer@euromoney.com. For full current rankings or participate in the beta programme register your interest at www.euromoneycountryrisk.com.
September 2011
In the latest results of Euromoney’s country risk survey, Taiwan and Chile are rated alongside developed markets France, the US and UK. Qatar shrugs off regional uncertainty, while country risk scores across the eurozone hit new lows. African sovereigns have also done well. Andrew Mortimer reports.
September 2011
The euro crisis has already resulted in the region’s country risk scores falling by a greater margin than the Asian economies in 1997. That’s before any of the countries involved has actually defaulted. Andrew Mortimer asks: how many years will Europe take to recover?
June 2011
Country risk rankings are dropping sharply in the Eurozone periphery and across the entire Middle East, including Qatar which had been viewed as relatively immune to the fallout from the Arab Spring. Andrew Mortimer reports.
February 2011
Euromoney’s latest country risk results reflect political turmoil in the Middle East and the continued uncertainty within the Eurozone. The global recovery is in serious danger of being undermined by a host of financial and political risks. Andrew Mortimer reports.
September 2010
Euromoney’s new-look country risk rankings reflect the seismic shifts that have taken place in international investment over the past three years. Markets that were once seen as growth opportunities are now becoming core investment propositions. Poorna Harjani reports.
March 2010
After a year that turned out better than anyone could have expected, 2010 began with a new bout of nerves on financial markets.
September 2009
With the international economy more volatile than ever, global investors are paying more attention to country risk analysis. Risk looms both where you most and least expect it. In Euromoney’s latest rankings, the US has fallen out of the top 10. Jacqueline Cutler reports.
March 2009
The impact of the credit crunch spread across the world over the past 12 months. Eastern Europe was badly hit, and the Middle East and Asia could no longer claim to be immune.
September 2008
It could be the perfect storm – financial, macroeconomic and geopolitical risk are all on the rise. Risk is both where you anticipate it, and where you least expect it.
March 2008
The US is in danger of dropping out of the top 10 in our semi-annual
country risk survey as fears of an economic downturn and an uncertain
political future dent analysts’ confidence.
September 2007
Despite the fallout from US sub-prime woes, analysts are optimistic about prospects for the global economy, as commodities remain strong. But the US drops out of the top five in Euromoney’s latest country risk rankings. Oliver Hexter reports.
February 2007
Event risk remains the biggest threat to the world’s economic prospects. But globalization means that, although economic imbalances might persist, the likelihood of a major worldwide correction is low.
September 2006
The latest country risk poll reflects a global economy in good health, despite a period of stock market volatility and the prospect of a slowdown. But the Middle East and the high price of oil could have far-reaching implications, writes Florian Neuhof. Research by Paul Pedzinski.
March 2006
Oil producers strike it rich, but long-term issues remain
The high price of oil highlights the fact that many economies are too reliant on raw materials exports, with governments creating unfavourable conditions for foreign investment through neglect or for political reasons. Florian Neuhof looks at the main drivers behind Euromoney’s latest country risk poll.
September 2005
Country risk index: Most countries have better access to capital than ever before and sovereign credit ratings have been on the rise for the past three years. But an increasingly tense geopolitical environment has led to marked decline in this year's country risk ratings. Research and analysis by Paul Pedzinski.
September 2005
A reveiw of 13 years of country risk, region by region. Emerging markets are now established as part of the fabric of international investment. But don't be fooled into thinking that the increased flow of investment follows a decline in risk. Research and analysis by Chloe Hayward.
March 2005
Country risk index: The latest Euromoney country risk survey reflects a slight downgrade in the assessment of overall risk levels despite sovereign upgrades from rating agencies.
September 2004
Country risk index: The latest Euromoney country risk survey, which for the first time incorporates data on perceptions of corruption, reflects continuing upheaval in the Middle East and Africa that is only partly compensated for by a favourable global trade environment.
March 2004
Country risk index: The strong currency is damaging economic performance in the eurozone. But the outlook for some emerging markets is brighter, thanks to rising commodity prices and improving prospects for Asia. Paul Pedzinski and Andrew Newby report.
September 2003
Country risk index: East Asia continues to lead the growth pack, but offers significant risk; Turkey is - once again - at a turning point; and Africa continues to be unsettled, but with less risk of inter-country contagion.
March 2003
Oil prices have helped cushion the effects of slack global growth for many energy exporters. Asian and European growth is accelerating but there are wide regional variations and the World Bank warns that the world economy may well slide into recession.
September 2002
Euromoney’s analysts have taken a measured view of such hyperbole as the “axis of evil” and resisted over-reacting to the situation in such regional crisis points as southern Africa. Latin America’s troubled economies suffer the severest downgrades.
March 2002
Six months ago rising oil prices, the bursting of the new economy bubble and weaker financial markets were increasing the dangers of a recession even before the blow of September 11. Although the direct effects of the attacks have been relatively small and sector-specific, the effect on business confidence is likely to be large in the short term. In our latest review of country prospects Euromoney's panel of experts has revised down average global projections for 2002-03 for 79 countries and has revised up 105. On balance, consensus growth forecasts indicate strong resurgence in 2003.
September 2001
Amid mounting concerns about a global economic slowdown, it is still country-specific political and economic factors that are propelling nations up and down the country risk rankings. There have been marked drops for such countries as Argentina, Zimbabwe, and Indonesia but no sign of fears of contagion spreading to their neighbours.
March 2001
In the past Euromoney’s country risk ratings have been reliable lead indicators of dips and surges in the world’s economic cycle. Six months ago the global economy looked in fine fettle, underpinned by favourable commodity prices and strong growth in developed countries. Financial markets are fearful this is about to change. Analysts’ forecasts for economic performance are noticeably lower than in September’s survey. But it’s not all doom and gloom. Research by Damon Ivanics and Andrew Newby
September 2000
It has been a busy year for presidential and parliamentary elections - and coup attempts. Throw in worker unrest (Peru, Ecuador, Ghana), violent separatism in Indonesia and looming emerging market elections and it would be wise to expect big changes in Euromoney’s first Country Risk ranking in 2001. Keri Geiger reports
January 2000
The last six months have seen a marked turnaround for the world economy. A year ago the larger emerging-market countries were falling in the rankings as investors lost confidence in Brazil, Russia and other crisis-ridden giants. This year favourable commodity prices, better risk management and buoyant developed country economies point to better times ahead. There are some big winners in the latest Euromoney country risk ranking. Research by Andrew Newby.
September 1999
The emerging markets are bouncing back - at least some of them are. While they do, the market is holding its breath as crisis-hit countries implement fiscal and monetary reforms. And while economists believe growth rates will improve, they are also resigned to sovereign defaults on foreign debt. Commentary by Rebecca Cicolecchia, research by Alexa Marx.
March 1999
September 1998
It's a measure of the turmoil in world markets that not a single bank was at first prepared to supply the forfaiting rates used by Euromoney in its calculation of these country-risk rankings. So fast were things changing that even these usually stable indicators became too volatile. Banks supplied them on request on a day-by-day basis to clients an indication of how difficult trade finance, the lubricant of the real economy, was becoming.
December 1997
After the emerging-markets crisis, which countries remain creditworthy?
March 1997
Continental Europe makes way for Scandinavia and North America in Euromoney's biannual survey of country creditworthiness. Pressure to conform to Maastricht criteria on Emu has dampened growth, tightened budget deficits and weakened consumer demand. High unemployment and currency weaknesses have pushed countries such as Switzerland, France and Italy down the ranking. Rebecca Dobson reports.
September 1996
In Euromoney's semi-annual ranking of country creditworthiness, the winners are the emerging countries of east and central Europe. But south-east Asian economies and even Japan are looking riskier, as debt ratios worsen and monetary instability spreads. Commentary by Rebecca Dobson.
March 1996
Economists now predict an upturn in the world economy. Country scores in Euromoney's country risk ranking, based on our poll of economists and political analysts, plus market data and World Bank debt figures, have jumped by an average of 2.75 percentage points. Research and commentary by Charles Piggott.
