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Country Risk Service Congo (Brazzaville) 1st Quarter

  • ID: 4470366
  • Country Profile
  • March 2020
  • Region: Democratic Republic of Congo, Republic of Congo
  • 20 Pages
  • The Economist Intelligence Unit
The sovereign risk rating remains at CCC, but the score has deteriorated by 3 points to 65 as economic activity is being tempered by declining oil production, putting exports in a slump. Following sustained reform efforts and fiscal consolidation, the government secured an IMF agreement in 2019. Despite improvements, the stock of debt remains unsustainable, and an upgrade is not likely, as we do not expect Congo-Brazzaville to be able to clear all its principal arrears, owing to low foreign reserves.

The currency risk rating is downgraded to B (from BB previously), and the score has deteriorated by 3 points, to 53. Economic growth remains sluggish, owing principally to declining exports as a result of weakness in the oil sector). However, the CFA franc is pegged to the euro, which provides an element of currency stability.

Banking sector risk remains CCC-rated, but the score has deteriorated by 1 point, to 64, as economic growth remains sluggish. The non-performing loan ratio is high, having risen during the recession of 2016-17. Government arrears to private suppliers are a particular problem, as affected firms fall into loan arrears themselves. Corruption and state intervention in the banking sector are a large weight on the rating, with low credibility and transparency in financial reporting.
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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 2020-21: Political stability

Central scenario for 2020-21: Election watch

Central scenario for 2020-21: International relations

Central scenario for 2020-21: Policy trends

Central scenario for 2020-21: Fiscal policy

Central scenario for 2020-21: Monetary policy

Central scenario for 2020-21: Economic growth

Central scenario for 2020-21: Inflation

Central scenario for 2020-21: Exchange rates

Central scenario for 2020-21: 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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