Country risk methodology
September 2004 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%), 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 GNI (Atlas Method) figures per capita and (2) on results of Euromoney poll of economic projections.
• Debt indicators (10%): calculated using these ratios from the World Bank's World Development Indicators 2004: total debt stocks to GNP (A), debt service to exports (B); current account balance to GNP (C). Developing countries which 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 World evelopment Indicators 2004.OECD