Boost in competitiveness echoes Armenia’s rising country risk ranking


Matthew Turner
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Better fiscal health and international financing have served to boost Armenia’s risk profile.

An improvement in Armenia’s business environment has coincided with its climb up Euromoney’s Country Risk rankings in the first half of 2012. Armenia’s ranking has improved by 10 places in the World Economic Forum’s (WEF) 2012 global competitiveness index, with the country now ranked 82nd globally. Published annually, the WEF index assesses the competitiveness of 144 economies. The report is compiled using publically available data and surveys of local entrepreneurs. The improvement in Armenia’s WEF ranking corresponds with its rising ECR country risk assessment. The sovereign’s ECR score has improved by three points since January, to 44, leaving Armenia ranked 78 on ECR’s rankings. Armenia has climbed 12 places in the rankings since Q1 2012.
 Source: ECR

Armenia’s economic assessment score increased by 3.2 points from Q1 2012 to 48.6 in September, the highest score increase among the three main assessment criteria’s covered in ECR’s survey. Armenia’s ECR government-finances indicator, which measures a country’s overall fiscal strength, rose from 4.0 for January to 4.5 for September, although the country still recorded a government deficit of 2.7% in 2012. Additionally, the sovereign’s score in the government non-payments/non-reptriation indicator (a measure of transfer risk) improved by 0.9 points from January to 6.7 in September. Accounting for Armenia’s increased economic score, David Babasyan, an analyst at the Central bank of Armenia and one of ECR’s contributors, says: “During 2011, the government of Armenia and the central bank attracted funds from various international financial institutions, which were successfully injected into the economy. “Increased competition in the financial sector has also contributed to more favourable terms of lending and easier access to finance.”

This article was originally published by Euromoney Country Risk.