Download Country Risk Updates – Q4 2015 Oct

Country Risk Updates – Q4 2015
Oct-Dec 2015
Risk Rating Changes
The risk ratings for Q4 2015 indicate that 3 countries have been upgraded and 4
countries have been
downgraded.
Country
Change
Cuba
▲
Czech
Republic
▲
Australia
▼
Brazil
▼
Uruguay
▼
Cyprus
▲
Egypt
▼
Extended WW Headline
Dun & Bradstreet upgrades Cuba's country risk
rating as the re-establishment of ties with
the US is set to boost consumption and
investment spending.
Dun & Bradstreet upgrades the Czech Republic's
country risk rating as growth surges in the
second quarter, despite the varied
negative external effects.
Dun & Bradstreet downgrades Australia's
country risk rating amid sustained
macroeconomic pressures, including a regional
slump and currency deterioration.
Dun & Bradstreet downgrades Brazil's country
risk rating as the recession deepens, investor
sentiment drops, and ongoing political turmoil
stymies crucial reforms.
Dun & Bradstreet downgrades Uruguay's country
risk rating in the wake of the recent
quarterly economic contraction and amid some
contagion from Brazil.
Dun & Bradstreet upgrades Cyprus' country risk
rating as the economic outlook brightens, with
household consumption and gross fixed capital
formation the primary growth drivers.
Dun & Bradstreet downgrades Egypt’s country
risk rating and outlook in the wake of the
downing of a Russian airliner.
Outlook Trend Changes
Country
Change
Israel
▼
South Korea
▲
Pakistan
▲
Extended WW Headline
Dun & Bradstreet downgrades its rating outlook
for Israel as violence with the Palestinians
leaves many dead on both sides, although a
Third Intifada looks unlikely given the
circumstances.
Dun & Bradstreet upgrades its rating outlook
for South Korea as quarterly data portrays a
resilient economy supported by a expansionary
fiscal stance and diversified industrial
sector.
Dun & Bradstreet upgrades its rating
outlook for Pakistan as the improving inflation
environment prompts a rate cut by the central
bank.
World Watch
Country
Algeria
Ethiopia
Morocco
Tunisia
Cambodia
Japan
Philippines
Thailand
Georgia
Lithuania
Serbia
Turkmenistan
Egypt
UAE
El Salvador
France
Luxembourg
United
Kingdom
Zimbabwe
Saudi Arabia
Spain
Switzerland
Slovenia
India
Extended WW Headline
Bouteflika removes a powerful security chief, which
could raise political tensions.
Essential transport and energy infrastructure
investment helps to drive economic growth.
Growth rises in the third quarter, driven by stronger
agricultural output.
Financial weaknesses, particularly in public-owned
banks, remain elevated.
Economic growth is likely to decelerate in 2016 as
external headwinds strengthen.
A third-quarter contraction is a possibility as
external headwinds weigh on the recovery.
Business opportunities abound as demographics and
economic structure enable long-term growth.
Contractions in non-tourism sectors limit overall
market potential.
Interest rates are hiked again over fears around
accelerating inflation.
In the past year, the competitiveness of the business
environment has improved.
EU accession is frustrated by new conditions for
membership alongside plunging support.
A feasibility study on the TAPI gas pipeline is
completed, although concerns remain.
The central bank governor resigns after a currency
devaluation.
Liquidity tightens as government deposits drop and
borrowing rises.
The security situation deteriorates amid spiking
homicide rates.
Payments performance remains below the European
average.
Economic expansion is being driven by investment.
A further cooldown of the economy is defied by the
thriving retail sector.
The growth outlook is poor given expectations of substandard rainfall.
Government continues to liquidate assets and is to
tap the international bond markets.
Buoyant private consumption and investment boost
economic growth.
Pressure builds on the franc, which is worrying for
the country's export sector.
Exports and private consumption to drive growth
during the forecast period.
Transport connectivity remains the key to higher
economic growth.
South Korea
Canada
United States
The economy's transition to a lower growth trend
leaves it more vulnerable to negative shocks.
Central bank and federal budget watchdog anticipate
slower growth and larger deficits.
High levels of inventories could drag on growth in
Q4.
Risk Rating Explanations
The DB risk indicator is divided into seven bands, ranging from DB1 through DB7.
Each band is subdivided into quartiles (a-d), with an ‘a’ designation representing
slightly less risk than a ‘b’ designation and so on. Only the DB7 indicator is not
divided into quartiles.
Indicat
or
Meaning
Explanation
DB1
Lowest Risk
DB2
Low Risk
DB3
Slight Risk
DB4
Moderate Risk
DB5
High Risk
DB6
Very High
Risk
DB7
Highest Risk
Lowest degree of uncertainty associated
with expected returns, such as export
payments and foreign debt and equity
servicing.
Low degree of uncertainty associated with
expected returns. However, country-wide
factors may result in higher volatility of
returns at a future date.
Enough uncertainty over expected returns to
warrant close monitoring of country risk.
Customers should actively manage their risk
exposures.
Significant uncertainty over expected
returns. Risk-averse
Customers are advised to protect against
potential losses.
Considerable uncertainty associated with
expected returns. Businesses are advised to
limit their exposure and/or select highreturn transactions only.
Expected returns subject to large degree of
volatility. A very high expected return is
required to compensate for the additional
risk or the cost of hedging such risk.
Returns are almost impossible to predict
with any accuracy. Business infrastructure
has, in effect, broken down.
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