How to assess a Country Risk

 

Country Risk Service
Country Risk Service monitors credit risk in 131 developed and emerging markets on a continuous basis, combining The Economist Intelligence Unit’s market-leading data capability and country expertise in a rigorous risk modelling framework. Our analysis and forecast focus on several dimensions of cross-border credit risk posed by a country, including sovereign, currency and banking sector risk. And then Overall Country Risk.
Report is composed of:
  • One-page summary: essential information related to 5 main ratings (Sovereign, Currency, Banking sector, Political and Economic structure).
    • Sovereign risk: Measures the risk of a build-up in arrears of principal and/or interest on foreign and/or local-currency debt that is the direct obligation of the sovereign or guaranteed by the sovereign.
    • Currency risk: risk of devaluation against the reference currency of 25% in the next 12 months
    • Banking sector risk: risk of a systemic crisis with banks holding more than 10% of total bank assets become insolvent and unable to discharge their obligations to depositors and/or creditors.
    • Political risk: evaluation related to political stability and effectiveness that could affect the ability of a country to serve its debt obligations.
    • Economic structure risk: based on macroeconomics variables of structural and non-cyclical nature.
    • Overall country risk: based on average of the scores for sovereign, currency and banking sector risk.
  • Analysis and outlook: explanation of the rating also related to positive or negative changes. It’s also available ratings outlook for the next 12 months
  • Central Forecast: Two-year forecast of the political, economic and external payments situation
  • Data tables: forecast and series related to relevant macroeconomic data impacting risk assessment, like public finances, exchange rates, banking sector, external payments position.
Every month per 12 months a new edition of Country Risk Service is available including changes affecting a country if applicable.

 

Country Report
Briefing sheet: summary on the report and key forecast changes is a short format
Five-year outlook: five-year forecast of political trends, economic policy and the domestic economy
Data an Charts: annual, quarterly and monthly statistical tables
Country snapshot: basic data, ministries, ministers and main political snapshot.
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