However, the downward shift in Germanys ECR score was not dramatic enough to off-set its stable position in the ECR rankings. The sovereign retains a comfortable position in tier one ECRs safest category and with a global rank of 12 it sits alongside Austria, the Netherlands and Denmark.
Countries in ECR tier one score between 80 and 100, and can be equated to a credit rating of AA and above. Meanwhile, Germanys economic risk score of 71.8 is the fifth strongest in the eurozone and sixth in the EU: only Sweden, Luxembourg, Finland, Netherlands and Austria now boast higher economic assessment scores.
The German economy has bulked regional growth trends since the on-set of the financial crisis in 2008, but a slowdown in global demand for German exports has left Europes largest economy wavering in 2012. Indeed, the countrys economic assessment deteriorated by 0.8 points in 2012 after a deterioration in the manufacturing and services PMIs (October) for the sovereign.
Christian Richter, principal lecturer in economics and finance at the University of East London and a member of ECRs expert panel, says: The outlook for Germany is negative for at least the next quarter on the basis that the car industry -- such as Volkswagen, but also Opel -- faces lower demand especially in Europe, due to the recession. German exports are expected to fall. The German car industry really represents the industrial sector as a whole and business confidence is shrinking.
This article was originally published by Euromoney Country Risk. To find out more: register for a free trial at Euromoney Country Risk.