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Country Risk Service Congo (Brazzaville) 1st Quarter

  • ID: 4470366
  • Country Profile
  • Region: Democratic Republic of Congo, Republic of Congo
  • 20 Pages
  • The Economist Intelligence Unit
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Congo's sovereign risk rating remains at CCC. Higher oil prices in 2018 and increasing output as new fields come on stream have had a positive effect on the external balance. However, we estimate that the fiscal account has remained in deficit, and Congo has a large external debt load-a risk that is aggravated by the opacity of its debt stock, weak institutions and low foreign reserves.

Currency risk has been upgraded to BB, following an improvement in financing and liquidity metrics. Most foreign-exchange inflows come from oil receipts, and although the global price for crude has been on a downward trend, the country's new oil production has led to an increase in foreign reserves, albeit from a low base. The CFA franc is pegged to the euro and guaranteed by the French Treasury, which provides an element of currency stability.

Banking sector risk remains CCC-rated. Non-performing loans are large, having risen substantially during the recession years of 2016-17. Government arrears to private suppliers remains another problem, as affected companies then fall into loan arrears themselves. This is a major weight on the rating. On the upside, private-sector credit growth is rising again after a long slump as the economy continues to recover from the 2016-17 recession.
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Country Risk Service Congo (Brazzaville) 1st Quarter

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Sovereign risk
Current assessment
Rating outlook

Central scenario for 2019-20: Political stability

Central scenario for 2019-20: Election watch

Central scenario for 2019-20: International relations

Central scenario for 2019-20: Policy trends

Central scenario for 2019-20: Fiscal policy

Central scenario for 2019-20: Monetary policy

Central scenario for 2019-20: Economic growth

Central scenario for 2019-20: Inflation

Central scenario for 2019-20: Exchange rates

Central scenario for 2019-20: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service
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