In the last quarter of 2015, Euler Hermes upgraded risk ratings for four countries, which began showing economic growth and improvements.
Côte d’Ivoire showed improvement last quarter as it went from an orange D3 rating to an orange C3. The West African nation’s gross domestic product (GDP) growth is forecast to reach 7%, or higher, in 2016 and 2017. Cyprus also remains a risky country, but improved its red B4 rating to an orange B3. The country lifted capital controls, successfully returning to bond markets with low interest rates, and its GDP is growing.
Economic growth in Honduras is set to remain strong in the coming years, and its country risk rating increased from an orange C3 to a yellow C2. The International Monetary Fund and Honduran government enhanced fiscal and external positions; inflation is contained and the fiscal deficit significantly narrowed. The business environment, however, remains problematic. “Although it performs particularly well with regard to getting credit and trading across borders, important shortcomings remain in enforcing contracts, protecting investors and resolving insolvency,” Euler Hermes says.
Real GDP growth in Ireland is strong, and its risk rating improved significantly from a yellow BB2 to a green A1. Ireland’s fiscal deficit has fallen, and debt sustainability has improved. “The expansion in both manufacturing and service sectors should remain strong, the consumer is likely to continue to benefit from a better economic outlook and external demand for Irish products should remain dynamic thanks to the improved price competitiveness,” Euler Hermes states.
- Jennifer Lehman, marketing and communications associate