Mean Euromoney Country Risk, March 2000 - March 2011

Country risk refers to the risk of investing or lending in a country, arising from possible changes in the

business environment Market environment and business environment are marketing terms that refer to factors and forces that affect a firm's ability to build and maintain successful customer relationships. The business environment has been defined as "the totality of ph ...

that may adversely affect operating profits or the value of assets in the country. For example, financial factors such as

currency controls Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currency, currencies by residents, on the purchase/sale of local currency by nonresidents, or the transfers of any currency across na ...

devaluation In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national curre ...

or regulatory changes, or stability factors such as mass riots, civil war and other potential events contribute to companies' operational risks. This term is also sometimes referred to as

political risk Political risk is a type of risk faced by investors, corporations, and governments that political decisions, events, or conditions will significantly affect the profitability of a business actor or the expected value of a given economic action. ...

; however, country risk is a more general term that generally refers only to risks affecting all companies operating within or involved with a particular country. Political risk analysis providers and

credit rating A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. ...

agencies use different methodologies to assess and rate countries' comparative risk exposure. Credit rating agencies tend to use quantitative econometric models and focus on financial analysis, whereas political risk providers tend to use qualitative methods, focusing on political analysis. However, there is no consensus on methodology in assessing credit and political risks.

Ratings

The least-risky countries for investment. Ratings are further broken down into components including political risk, economic risk. Euromoney's quarterly country risk index "Country risk survey" monitors the political and economic stability of 185 sovereign countries. Results focus foremost on economics, specifically

sovereign default A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due. Cessation of due payments (or receivables) may either be accompanied by that government's formal declaration that it wi ...

risk and/or payment default risk for exporters (a.k.a. "trade credit" risk).

Partial list of credit risk rating agencies

* Fitch Ratings (U.S.) * Moody's (U.S.) * Standard & Poor's (U.S) * CTRISKS (Greater China)

Partial list of political risk analysis organizations

* Euromoney Country Risk, ECR * IHS Country Risk * BMI Research * Country Risk Solutions * Economist Intelligence Unit * Eurasia Group * Maplecroft * Oxford Analytica * The PRS Group, Inc.

References

External links

Downloadable country analysis and reports

Coface Economic Studies

Credendo Country Risk Ratings

The Benche Analysis & Reports

Euler Hermes Country Reports

Maplecroft

The PRS Group, Inc.
Financial economics Business terms Sovereign default {{Business-term-stub