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 CC, although the risk of a prolonged default on its Eurobond has waned. The foreign-exchange reserves/external short-term debt and debt-service ratios scores have also improved, on the back of rising oil prices. However, concerns over Congo's ability to repay its creditors persist, because of arrears accumulation and an unresolved legal dispute. The state's ability to borrow will be hindered by rising risk premiums on external borrowing and a prolonged downturn in investor confidence.

Currency risk remains B rated. The CFA franc is pegged to the euro and guaranteed by the French Treasury, which provides an element of currency stability. However, Congo's foreign reserves have fallen to the equivalent of 1.5 months of import cover, a risky level for a country with a pegged currency, which will remain a key concern.

The banking sector risk retains its CCC rating. Heavy public spending in 2014-16 has contributed to a build-up of public domestic and external debt arrears. There is a growing risk that the state will crowd out lending to the private sector, as the public finances remain under strain. The non-performing loan ratio has risen over the past two years because of the impact of government arrears on private firms.
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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 2018-19: Political stability

Central scenario for 2018-19: Election watch

Central scenario for 2018-19: International relations

Central scenario for 2018-19: Policy trends

Central scenario for 2018-19: Fiscal policy

Central scenario for 2018-19: Monetary policy

Central scenario for 2018-19: Economic growth

Central scenario for 2018-19: Inflation

Central scenario for 2018-19: Exchange rates

Central scenario for 2018-19: 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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