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For historical country risk data please visit the Euromoney Country risk website |
Research by Hugo Fildes.
Methodology – Overall country risk:
To obtain the overall country risk score, Euromoney assigns a weighting to nine categories. These are political risk (25% weighting), economic performance (25%), debt indicators (10%), debt in default or rescheduled (10%), credit ratings (10%), access to bank finance (5%), access to short-term finance (5%), access to capital markets (5%), and forfaiting (5%).
• Political risk (25% weighting): the risk of non-payment or non-servicing of payment for goods or services, loans, trade-related finance and dividends, and the non-repatriation of capital. Risk analysts give each country a score between 10 and zero: the higher, the better.
• Economic performance (25%): based (1) on results of Euromoney poll of economic projections and (2) on GNI (Atlas Method) figures per capita.
• Debt indicators (10%): calculated using the following ratios from the World Bank’s Global Development Finance 2007. Total debt stocks to GNP (A), debt service to exports (B); current account balance to GNP (C). Developing countries that do not report complete debt data get a score of zero.
• Debt in default or rescheduled (10%): scores are based on the ratio of rescheduled debt to debt stocks, taken from the World Bank’s Global Development Finance 2007.OECD and developing countries that do not report under the debtor reporting system (DRS) score 10 and zero respectively.
• Credit ratings (10%): nominal values are assigned to sovereign ratings from Moody’s Investors Service, Standard & Poor’s and Fitch IBCA. The higher the average value, the better. Where there is no rating, countries score zero.
• Access to bank finance (5%): calculated from disbursements of private, long-term, unguaranteed loans as a percentage of GNP. Source: World Bank’s Global Development Finance 2007.
• Access to short-term finance (5%): takes into account OECD consensus groups (source: ECGD) and short-term cover available from the US Exim Bank and Atradius UK
• Access to capital markets (5%): heads of debt syndicate and loan syndications rated each country’s accessibility to international markets.
• Discount on forfaiting (5%): reflects the average maximum tenor for forfaiting. Countries where forfaiting is not available score zero. We would like to thank Atradius, London Forfaiting, Mezra Forfaiting and WestLB, which kindly supplied data.
Country Risk: Corruption adjusted rankings by region
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For historical country risk data please visit the Euromoney Country risk website |
