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Risk Ratings Review (CRS) Updater

  • ID: 2101449
  • Country Profile
  • July 2020
  • Region: Global
  • 43 Pages
  • The Economist Intelligence Unit
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As Latin America sinks into a deep recession, the question of the region's capacity for fiscal stimulus is crucial. Most countries are fiscally weaker than before the 2008-09 global financial crisis, when the region was enjoying its commodities-fuelled boom; average public debt is now up to nearly 60%. However, governments in several countries (such as Brazil, Colombia, Mexico and Peru) at least controlled past urges to borrow from offshore in the post-crisis decade of abundant liquidity, turning instead to deepening local capital markets. This will help to reduce public-sector exposure to global US dollar funding stresses. Others (including Costa Rica and Ecuador) have dialled up bond issuance in recent years to plug fiscal gaps, and now look increasingly at risk. Brazil and Mexico-the region's heavyweights-should be able to deploy some limited stimulus without stoking fears around debt sustainability. However, sharp rises in public debt/GDP ratios will leave a difficult legacy and eventually require policymakers to pursue politically unpalatable consolidation measures. As many firms are likely to go out of business despite temporary government support, the fabric of the region's productive sector will be damaged, hurting the tax revenue base and the economic outlook.

Chile: Sovereign risk remains BBB-rated. Successive fiscal deficits, set to peak in 2020 at 11% of GDP, and a forecast recession amid the coronavirus (Covid-19) crisis will lift public debt. The rating is supported by sound macroeconomic policy, ample foreign reserves and access to two sovereign wealth funds, which held a total of US$22.2bn (9.3% of GDP) in March. As macroeconomic performance weakens, The Economist Intelligence Unit considers that a downgrade to BB is possible.

Cuba: Sovereign risk remains CC-rated. The ongoing Covid-19 pandemic has led to a global recession and the closure of Cuba's borders. This will push the country into a deep recession and remove a significant source of foreign exchange. The country has asked for a temporary reprieve on its Paris Club obligations, and we believe that a good-faith rescheduling with creditors is possible.
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Risk Ratings Review (CRS) Updater

Ratings changes and outlook: Upgrades and downgrades

Americas: Sovereign risk
June 2020

Americas: Currency risk
June 2020

Americas: Banking sector risk
June 2020

Asia and Australasia: Sovereign risk
June 2020

Asia and Australasia: Currency risk
June 2020

Asia and Australasia: Banking sector risk
June 2020

Europe: Sovereign risk
June 2020

Europe: Currency risk
June 2020

Europe: Banking sector risk
June 2020

Middle East and North Africa: Sovereign risk
June 2020

Middle East and North Africa: Currency risk
June 2020

Middle East and North Africa: Banking sector risk
June 2020

Sub-Saharan Africa: Sovereign risk
June 2020

Sub-Saharan Africa: Currency risk
June 2020

Sub-Saharan Africa: Banking sector risk
June 2020

Country risk ratings

Country risk ratings: Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Monthly countries: Americas: Sovereign risk ratings

Monthly countries: Americas: Currency risk ratings

Monthly countries: Americas: Banking sector risk ratings

Monthly countries: Americas: Political risk ratings

Monthly countries: Americas: Economic structure risk ratings

Monthly countries: Americas: Overall country risk ratings

Monthly countries: Asia & Australasia: Sovereign risk ratings

Monthly countries: Asia & Australasia: Currency risk ratings

Monthly countries: Asia & Australasia: Banking sector risk ratings

Monthly countries: Asia & Australasia: Political risk ratings

Monthly countries: Asia & Australasia: Economic structure risk ratings

Monthly countries: Asia & Australasia: Overall country risk ratings

Monthly countries: Europe: Sovereign risk ratings

Monthly countries: Europe: Currency risk ratings

Monthly countries: Europe: Banking sector risk ratings

Monthly countries: Europe: Political risk ratings

Monthly countries: Europe: Economic structure risk ratings

Monthly countries: Europe: Overall country risk ratings

Monthly countries: Middle East & North Africa: Sovereign risk ratings

Monthly countries: Middle East & North Africa: Currency risk ratings

Monthly countries: Middle East & North Africa: Banking sector risk ratings

Monthly countries: Middle East & North Africa: Political risk ratings

Monthly countries: Middle East & North Africa: Economic structure risk ratings

Monthly countries: Middle East & North Africa: Overall country risk ratings

Monthly countries: Sub-Saharan Africa: Sovereign risk ratings

Monthly countries: Sub-Saharan Africa: Currency risk ratings

Monthly countries: Sub-Saharan Africa: Banking sector risk ratings

Monthly countries: Sub-Saharan Africa: Political risk ratings

Monthly countries: Sub-Saharan Africa: Economic structure risk ratings

Monthly countries: Sub-Saharan Africa: Overall country risk ratings
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