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Country Risk Service Austria 3rd Quarter Updater

  • ID: 4591412
  • Country Profile
  • July 2020
  • Region: Austria
  • 19 Pages
  • The Economist Intelligence Unit
The sovereign risk score worsened by 7 points in The Economist Intelligence Unit's April asssessment, to 27, triggering a rating downgrade to A, from AA previously. This reflects a deterioration in macroeconomic conditions, following the global coronavirus outbreak Increasing public borrowing, contracting real GDP growth and deteriorating global trade conditions all underpin the downgrade in the rating.

The currency risk rating remained at A, but the score deteriorated by 1 point to 27, reflecting a worsening external environment and tighter short-term funding conditions. The rating is supported by the euro zone's economic and institutional framework, which has been strengthened since 2015, but the current crisis will add volatility to the currency.

The banking sector risk rating was unchanged, at A, but the underlying score worsened by 5 points, to 26. Contracting real GDP and lower interest rates will weigh on bank profitability. However, the banking sector has improved its capital position in recent years. Improvements in the sector's resilience and government measures mean we are unlikely to see the public health crisis evolving into a wider banking crisis-although it is too early to say.
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Country Risk Service Austria 3rd Quarter Updater

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

Central scenario for 2020-24: Political stability

Central scenario for 2020-24: Election watch

Central scenario for 2020-24: International relations

Central scenario for 2020-24: Policy trends

Central scenario for 2020-24: Fiscal policy

Central scenario for 2020-24: Monetary policy

Central scenario for 2020-24: Economic growth

Central scenario for 2020-24: Inflation

Central scenario for 2020-24: Exchange rates

Central scenario for 2020-24: 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

Foreign payment and liquidity indicators

External trade
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