Coface : 2007 Country risk credit ratings

On the occasion of its annual conference on world country risk trends,
Coface reports a small increase in risks for 2007 after the broad
improvement in recent years.

► GDP growth will be slower in industrialised countries with risks higher in some
economic sectors and growth rates converging for the United States and European Union.
► Growth of foreign currency debt owed by companies would hamper emerging countries in face of an exchange rate crisis, a sudden downturn, or a loss of operator confidence linked to the governance problems in some of those countries.
► Asia continues to post record growth rates, but corporate risk is not improving. In China, a deterioration in payment behaviour is being noted.
► Latin America is the only region where risks will decline significantly in 2007, with the major economies in the region coming out of debt and thus fostering a more stable business environment.
► Activity in Central Europe and Turkey will remain dynamic but their companies have been taking on too much debt with the region by far the most vulnerable to currency risk.
► In the CIS, growth will remain robust but the risks associated with governance
shortcomings cannot be ignored.
► North Africa, the Near & Middle East will continue to benefit from a favourable
economic environment, but remain vulnerable to regional geopolitical developments and persistent governance weaknesses.
► Although sub-Saharan Africa will continue to consolidate its economic situation thanks notably to raw material prices, it will also remain affected by continuing political and governance deficiencies.

Click here to view the report. (127KB PDF File)