Country risk Sep 1996: Asia's economies start to slip
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.
The results look encouraging for eastern Europe and Latin America; they look worrying for Asia.
Every six months, Euromoney polls economists and political analysts for their views on the creditworthiness of almost 170 countries around the world. To that, we add an array of quantitative data, from debt ratios to access to capital markets (see detailed methodology). The result is a sensitive measure of the riskiness of investing in these economies.
This month's rating justifies the growing perception that Asia is become economically mature and more politically unstable. On average, the Asian countries have slipped in the ranking by 2.5 places. Political tensions explain the fall in Indonesia, down two places from March's ranking to 41. The recent run on the baht and concerns about a build-up in short-term debt are behind the four-place drop of Thailand to 30. Japan falls even further from fourth to 12th as its economy, which earlier in the year looked to be recovering, slides back into stagnation.