|
For historical country risk data please visit the Euromoney Country risk website |
Our analysts are still optimistic about the world’s largest economy, for all the recent discussion about a possible recession. Any concerns about a hard landing in the United States are not reflected in their overall rating of its economic performance, which has even risen since last September’s review.
Indeed ratings for a clear majority of countries – 106 in all – and 94 country scores for wealth-adjusted economic performance have been revised upwards. Some caution is advisable however, especially in emerging markets.
In Japan and China, GNP growth projections for both 2001 and next year have been revised upward since September’s survey. Despite this, overall country risk ratings for all major Asian economies, with the exceptions of Singapore and India, have fallen. The steady decline of Japan down the risk ratings now raises the prospect of its country risk scores being de-coupled from those of its peers in the developed world. On February 22nd, Standard&Poor’s lowered its long term sovereign credit ratings on Japan to AA+ from AAA. This reflected the government’s diminished fiscal flexibility, its rising debt levels, and its protracted approach to structural reform.
The sharpest falls elsewhere in Asia were experienced by the Kyrgyz Republic (138) and Turkmenistan (155), which dropped 30 and 32 places respectively. Economic performance scores for all five central Asian republics were adjusted downwards and only Kazakhstan maintained its political risk rating.
South Korea (47), where banking and corporate reform appear stalled, suffered the steepest fall of the east Asian region, though its overall score has only dropped slightly.
In Europe, Scandinavian countries continue their impressive showing of previous surveys.
Denmark (4) and Norway (3) each now have a higher country score than the United States, whose political score has fallen following a chaotic election. France and Germany are near the top of our league table for projected growth for 2001-2. Central Europe has benefited from the strong performance of the western European economy. For the same period, political change in Yugoslavia (178) has been translated into a tripling of analysts’ average GNP forecasts.
Argentina (66) fell 9 places following the near crisis and implementation of a $40 billion IMF-led rescue package at the end of last year. As in the case of South Korea, this is due to a relative fall rather than to any spectacular downgrading. Brazil (64) climbs 3 places and continues to be assisted by strong capital inflows and low interest rates.
Nicaragua (108) and Ecuador (113) are two of the highest climbers in the whole survey, with analysts becoming optimistic on political prospects in both countries.
Elsewhere Bermuda (24), New Caledonia (171) and Burundi (149) saw the biggest improvements in their overall economic performance rating. The most improved political scores were registered by Nicaragua (108), Kuwait (29) and Ecuador. Higher scores for the Pacific states in general reflect improved data on economic projections.
|
|
For historical country risk data please visit the Euromoney Country risk website |
Euromoney received replies from 30 economists at leading financial and economic institutions. They gave each country’s economic performance for 2001 and 2002 a score out of 100. The world’s fastest-growing, best-performing economy in an ideal year would score 100; the worst economy in a disastrous year would score zero. Respondents were asked to consider economic growth, monetary stability, current account, budget deficit or surplus, unemployment and structural imbalances. Economists also gave their GNP growth forecasts for 2001 and 2002. Countries which received no votes were excluded from this table.
Our thanks go to the 45 political analysts and economists who took part in our surveys. Those who did not wish to remain anonymous were:
Dr. Michael O’Leary, The PRS Group; Bernard Butticker, UBS AG; Conrad Schuller, Erste Bank; Dr. James Wang, Bank of East Asia; Nicollas Francois, Credit Lyonnais; George Samu, Royal Bank of Canada; Gregor Eder, Claudia Henke, Dresdner Bank; MarieVictoire de Groote, Fortis Bank; John Krijgsman, CIBC; Karla Schestauber, Creditanstalt; Luigi Ruggerone, Banca Commerciale Italiana; Richard McGuire and team, Dun&Bradstreet; A.
Francis, UWI; Sruti Patel, Afrinvest; Veronika Lammer, Erste Bank; Reijo Heiskanen, Nordea; Anthony Larroy and team, UBC; Jane Edwards, Lehman; country risk team,CSFB; Hanan Amin Salem, JP Morgan.
