Country Risk Improvement Most Notable in Northern Europe, Sub-SaharanAfrica

Brand new analysis from global credit insurer Coface found particularly noteworthy business credit improvements in eight nations worldwide. All of them are located in Europe or, perhaps surprisingly, long-troubled Africa.

Perhaps least surprising were improvements in Germany and Austria, which both maintained an A2 risk rating, the second highest of seven possible Coface ratings, but moved to a positive outlook. Analysts noted Germany’s slight shift toward consumerism may help take pressure off of traditional exporting activity needs. Austria is prone to improve because of low insolvency levels and unemployment. Also moving into the positive outlook area is Latvia, which boasts a B risk rating, fifth among seven ratings Coface ratings levels.

On the backs of a diversified recovery that included heightened exports and booming confidence levels is improvement in Ireland. It was moved up from an A4 to an A3 risk rating, though it is no longer in the positive outlook territory to move above that level quickly.

Like Ireland, Ivory Coast moved up one notch (to a C) from the lowest level (D). While Kenya, Nigeria and Rwanda did not move up in January 2014 credit risk metrics, Coface did move all three into a positive outlook. The four African nations are “part of a new generation of countries characterized to resistance to external shock.” Still, each has a long way to go, with none earning a risk rating above a C…for now.

Coface was less enthused by growth prospects and credit stability within the still-debt-troubled European nations (France, Italy) as well as formerly hot emerging economies facing a proverbial glass ceiling based on infrastructure issues as well as volatile exchange rates in the run-up to major elections (India, Turkey, South Africa, Brazil).

- Brian Shappell, CBA, CICP, NACM staff writer

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