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EMEA Emerging Markets Sovereign Rating Trends 2020

(Editor's Note: We republished this report on Jan. 31, 2020, to update some data in Table 2 and the sovereign summaries tables.)

Chart 1

image

Rating Outlook And Trends

S&P Global Ratings rates 53 sovereigns in emerging countries in EMEA, across three regions: the Commonwealth of Independent States and Central and Eastern Europe (CIS+CEE; 20 sovereigns); the Middle East and North Africa (MENA; 13 sovereigns); and sub-Saharan Africa (SSA; 20 sovereigns). As of January 2020, we rate 11 more sovereigns than we did 10 years ago, all of which are in SSA.

The emerging EMEA region as a whole is highly heterogeneous, ranging from investment-grade EU members with relatively deep local capital markets such as Hungary and Poland, which fund themselves primarily in their own currency, to far more dollarized SSA and MENA economies, which pay higher interest rates in real terms in both local and foreign currency. SSA governments are among the most leveraged globally when debt is measured as a percentage of their low public revenues (general government revenue to GDP averages 19.5%). At the other extreme, within the Gulf Cooperation Council (GCC), the governments of Kuwait ('AA'), Abu Dhabi ('AA'), Qatar ('AA-'), and Saudi Arabia ('A-') have the first, second, fifth, and eighth strongest net general government asset positions in the world, and are all among the world's largest net creditor nations (though they also tax a fairly modest percentage of gross domestic product). One question we ask in our GCC analysis is how liquid these assets are, and how fungible they are with rising stocks of GCC gross government debt. If you strip out returns on public assets, very few if any GCC sovereigns are operating budgetary surpluses. Perhaps even more fundamentally, GCC sovereigns remain highly dependent on oil rents, making them vulnerable to steps taken at the global level to tax and discourage the consumption of fossil fuels.

The current net balance of positive versus negative outlooks in EMEA's emerging markets is negative, with five sovereign ratings on positive outlook, and six on negative. Since we published our last EMEA emerging markets rating trends report in July 2019, we have revised the outlooks on Romania ('BBB-'), and South Africa ('BB') from stable to negative; and have downgraded Zambia to 'CCC+' with a stable outlook. In November, we lowered the sovereign rating on Lebanon by two notches to 'CCC' and assigned a negative outlook.

Since last summer, Lebanese authorities have introduced an array of emergency measures, including capital controls, to preserve the Banque du Liban's (the central bank) stock of reserves. These measures included a de facto default by Banque du Liban (not rated by S&P Global Ratings) on its commercial obligations to the domestic banking system. On Jan. 1, Lebanon announced a new cabinet that will confront dual challenges: persistent protests, and potentially sceptical donor nations that in principal could provide emergency credit lines to shore up confidence in Lebanon's distressed financial system.

Positive EMEA emerging market sovereign actions over the last six months include the revision of the outlook on Bahrain ('B+') to positive from stable, reflecting further progress in consolidating public finances including being the first in the GCC to introduce VAT. Last year we also upgraded Bulgaria and Serbia on the back of strong growth and fiscal outcomes, while maintaining a positive outlook on both. Finally, during 2019, we raised our ratings on Georgia and Ukraine and assigned stable outlooks on both. 2020 could be a breakthrough year for Ukraine's economy, which is benefiting from its Association Agreement with the European Union, and a new government legislating to improve the business environment and perhaps taking the first steps toward reforming an inefficient and opaque judicial system. Finally, we revised our outlook on Morocco ('BBB-') to stable from negative, reflecting solid growth based on the further expansion of the export sector into higher value added manufacturing and services.

Risk Scenarios For 2020

Given the near balance in our sovereign outlooks for the region, we see prospective macroeconomic conditions in emerging markets EMEA as relatively neutral for 2020. Nevertheless, we highlight two possible risk scenarios for sovereign ratings:

  • A rerun of the eurozone crisis but in EMEA's emerging markets: The trigger for the eurozone crisis was a sudden halt to cross-border financing of the large external deficits prevalent in Southern Europe and Ireland one decade ago, combined with constraints on monetary flexibility in the Economic and Monetary Union (EMU). The ensuing interest rate shock rendered rising stocks of public debt unsustainable. Could this scenario play out again, but in the emerging markets?
  • Conflict in the Middle East: How likely is tension in the region to escalate even further, leading to outright confrontation?
Could there be a rerun of the eurozone crisis but in emerging EMEA?

Negative real interest rates are no longer relegated to slower-growing wealthy eurozone members and Japan. Indeed, at present every member of the EU-27, with the exception of Romania, is posting negative real interest rates across the majority of the domestic yield curve (when real interest rates are defined by nominal yields deflated by expected inflation). From a fiscal sustainability perspective, there is nothing wrong with low financing costs, particularly if they can be locked in at longer maturities, as has occurred in Hungary and Poland since 2013. However, low yields are also pushing portfolio inflows further south and east into crowded local fixed income markets in Egypt, Ghana, South Africa, and Ukraine. And what if low rates are only temporary, and large non-resident inflows are set to reverse?

If there were an unanticipated global inflation shock, or another trigger for risk aversion leading to a strengthening U.S. dollar, crowded local currency trades could unwind, leading to exchange rate volatility and a reversal of successive rate cuts implemented over the last 12 months in various emerging markets (including Turkey). The ensuing domestic interest-rate shocks would drag on growth, and weaken fiscal positions. Nevertheless, we don't think this would lead to permanent damage to public balance sheets.

The eurozone crisis was essentially a balance-of-payments crisis exacerbated by EMU member states' monetary flexibility constraints. For such a scenario to play out in EMEA's emerging markets, you would need to see a combination of large debt-financed external deficits (such as have been recently unwound in Turkey) alongside monetary rigidities either in the form of semi-fixed exchange rates, or a high level of dollarization, or both. Compared to a few years ago, there are few if any larger EMEA economies that are operating current account deficits in 2020 that will exceed 5% of GDP. The exceptions are crowded in the upper right hand corner of chart 2 and include Lebanon, Montenegro, Oman, as well as several SSA countries. Among the larger emerging EMEA economies, only Romania and Serbia (where net FDI covers close to 100% of the financing), are operating current account deficits over 5% of GDP. While the financial systems in both countries are partly euroized (31% of system deposits in Romania, and 58% but steadily declining in Serbia), they still benefit from a degree of exchange rate flexibility. Looking at EMEA emerging markets as a whole, there are reasons to believe that countries that may have been vulnerable to external shocks in the past and which have seen large portfolio inflows (such as Egypt and Ukraine) are considerably less so today, as current accounts remain modest, and reserve accumulation has been substantial.

Chart 2

image

Geopolitical Shock

Last December's U.S. airstrikes against Kataib Hezbollah, followed by the killing of Qasem Soleimani, have exacerbated already roiling tensions in the Middle East. Protests continue in Iraq, where the caretaker government has requested that the U.S. withdraw its troops. Meanwhile, Iran continues to shore up its influence in the region via its proxies, but has not ruled out negotiations with the U.S. In Lebanon, a new government has been formed in the face of protests and a deepening economic and financial crisis. The U.S.'s willingness to back the new Lebanese government remains unclear. One risk is that Iran will retaliate further against the U.S. presence in Iraq, and against regional U.S. allies including, but not limited to, Israel and Saudi Arabia. Under some scenarios, this could result in further interruptions to regional oil production, temporary blockages in the Strait of Hormuz, or even outright conflict, pushing up oil prices and weighing on global growth and particularly large net energy importers such as South Africa and Turkey, and most EU members. Another concern is that ISIS regains a foothold in the region, leading to a rise in terrorist incidents.

A second somewhat broader risk is that the U.S. moves ahead with tougher sanctions against Russia or Turkey or both. Our base case is that the current U.S. administration will not impose direct sanctions against Russian or Turkish financial institutions or secondary sovereign debt markets. However, congress is working on several pieces of legislation on sanctions against Turkey. Were the presidential elections in the U.S. to result in a change of administration, a more aggressive approach to Turkey and Russia could not be ruled out.

Table 1

EMEA Developed Markets Sovereign Rating Strengths And Weaknesses
Sovereign foreign currency ratings Institutional assessment Economic assessment External assessment Fiscal assessment, budget performance Fiscal assessment, debt Monetary assessment

Abu Dhabi

AA/Stable/A-1+ 4 1 2 1 1 4

Albania

B+/Stable/B 5 5 4 3 5 5

Angola

B-/Negative/B 5 6 6 6 6 5

Azerbaijan

BB+/Stable/B 5 5 3 1 1 5

Bahrain

B+/Positive/B 5 4 4 6 6 4

Belarus

B/Stable/B 5 5 5 3 2 5

Benin

B+/Stable/B 4 5 5 3 5 5

Bosnia and Herzegovina

B/Positive/B 5 5 4 3 1 6

Botswana

A-/Stable/A-2 3 5 1 3 1 4

Bulgaria

BBB/Positive/A-3 4 4 2 1 1 5

Burkina Faso

B/Stable/B 5 6 5 5 2 5

Cameroon

B/Negative/B 6 5 4 4 3 5

Cape Verde

B/Stable/B 4 5 5 4 6 5

Congo

B-/Stable/B 6 6 6 3 6 5

Congo, D.R.

CCC+/Positive/C 6 6 6 4 2 6

Croatia

BBB-/Stable/A-3 4 4 2 2 5 4

Egypt

B/Stable/B 5 5 5 6 6 4

Ethiopia

B/Stable/B 5 5 6 6 3 5

Georgia

BB/Stable/B 4 5 5 3 2 4

Ghana

B/Stable/B 5 5 6 6 6 4

Hungary

BBB/Stable/A-2 4 4 2 2 4 3

Iraq

B-/Stable/B 6 6 3 6 4 6

Israel

AA-/Stable/A-1+ 4 1 1 3 3 2

Jordan

B+/Stable/B 4 6 6 2 5 4

Kazakhstan

BBB-/Stable/A-3 5 4 2 1 2 4

Kenya

B+/Stable/B 4 5 5 6 6 4

Kuwait

AA/Stable/A-1+ 4 3 1 1 1 3

Lebanon

CCC/Negative/C 6 6 6 6 6 6

Montenegro

B+/Stable/B 4 4 6 3 5 6

Morocco

BBB-/Stable/A-3 4 5 3 3 3 3

Mozambique

CCC+/Stable/C 6 6 6 6 6 5

Nigeria

B/Stable/B 5 6 5 5 4 4

North Macedonia

BB-/Stable/B 5 4 3 3 3 4

Oman

BB/Negative/B 4 5 4 6 2 4

Poland

A-/Stable/A-2 4 4 2 3 2 2

Qatar

AA-/Stable/A-1+ 4 1 4 1 1 4

Ras Al Khaimah

A/Stable/A-1 4 3 2 1 1 5

Romania

BBB-/Negative/A-3 4 4 3 4 3 3

Russia

BBB-/Stable/A-3 5 5 1 3 1 3

Rwanda

B+/Stable/B 4 5 5 6 3 4

Saudi Arabia

A-/Stable/A-2 4 4 1 4 1 4

Senegal

B+/Stable/B 4 4 5 5 5 5

Serbia

BB+/Positive/B 4 4 4 2 2 4

Sharjah

BBB+/Stable/A-2 4 3 2 3 2 5

South Africa

BB/Negative/B 4 5 3 6 6 2

St. Helena

BBB-/Stable/A-3 3 5 4 3 1 5

Tajikistan

B-/Stable/B 5 6 5 6 4 6

Togo

B/Stable/B 5 6 6 3 3 5

Turkey

B+/Stable/B 5 4 6 4 3 4

Uganda

B/Stable/B 5 6 4 6 6 4

Ukraine

B/Stable/B 5 5 5 3 4 6

Uzbekistan

BB-/Stable/B 5 5 3 5 1 4

Zambia

CCC+/Stable/C 5 6 6 6 6 4
Median 5.0 5.0 4.0 3.0 3.0 4.0
Mean 4.6 4.7 4.0 3.8 3.4 4.4

Table 2

EMEA Emerging Markets Economic Outlook
Real GDP growth (%) GG balance / GDP (%) Net GG debt / GDP (%) Current account balance / GDP (%) Narrow net ext. debt / CAR (%)
2019 2020 2019 2020 2019 2020 2019 2020 2019 2020
Abu Dhabi (Emirate of) 1.8 2.8 8.5 6.6 (227.1) (227.0) N/A N/A N/A N/A
Albania 3.0 3.5 (2.5) (2.0) 63.1 62.0 (6.5) (6.3) 11.2 12.4
Angola 0.5 1.5 (0.2) (1.0) 72.1 71.0 2.6 1.4 102.4 103.2
Azerbaijan 2.0 1.7 8.1 2.4 (51.6) (54.5) 8.8 6.1 (78.2) (93.1)
Bahrain 2.1 2.1 (5.7) (5.1) 67.2 70.7 (3.6) (4.1) (36.3) (32.5)
Belarus 1.2 2.0 1.5 1.5 26.6 27.8 (2.3) (2.0) 60.6 60.3
Benin 6.4 6.5 (2.5) (2.4) 32.6 32.7 (4.8) (4.7) 85.4 86.4
Bosnia and Herzegovina 2.5 2.6 1.0 0.5 22.6 22.1 (5.4) (5.7) 20.6 22.0
Botswana 4.1 4.3 (3.0) (1.5) 1.7 3.1 1.9 1.6 (48.9) (43.7)
Bulgaria 3.6 3.0 0.1 0.0 11.6 11.0 0.8 (0.3) (37.1) (42.1)
Burkina Faso 6.0 6.3 (3.0) (3.5) 36.6 37.7 (7.0) (7.2) 66.3 69.4
Cameroon 4.0 4.0 (3.0) (3.0) 31.3 33.1 (3.5) (3.5) 95.4 106.7
Cape Verde 5.2 4.7 (3.0) (2.8) 105.6 103.1 (5.4) (5.0) 89.9 82.8
Congo-Brazzaville 5.0 1.0 7.0 6.0 88.5 82.4 5.4 2.7 96.8 86.5
Congo (the Democratic Republic of the) 3.2 3.2 (1.8) (1.6) 40.1 39.4 (4.0) (4.0) 108.2 104.9
Croatia 2.9 2.5 (0.1) (0.4) 66.0 63.7 0.8 0.4 33.1 32.1
Egypt 5.6 5.7 (8.2) (7.8) 77.6 76.9 (2.1) (2.1) 79.9 76.6
Ethiopia 7.8 7.5 (3.2) (3.2) 27.2 28.4 (6.9) (6.8) 175.6 188.8
Georgia (Government of) 4.5 4.0 (2.5) (2.8) 42.2 43.2 (6.5) (6.4) 86.7 85.0
Ghana 6.5 5.7 (6.2) (5.2) 55.9 56.2 (2.1) (2.2) 124.5 126.2
Hungary 4.8 3.2 (1.8) (1.2) 63.5 61.0 0.3 0.5 18.6 16.0
Iraq 3.0 4.3 (4.9) (4.8) 40.3 42.7 9.4 8.4 (7.2) (6.9)
Israel 3.1 3.2 (3.6) (3.2) 58.9 59.0 2.6 2.7 (49.7) (48.6)
Jordan 2.2 2.5 (0.4) (0.3) 63.2 62.2 (7.7) (7.5) 49.6 53.4
Kazakhstan 4.0 3.8 (1.3) (0.4) (16.4) (17.1) (1.5) (1.1) (44.1) (46.7)
Kenya 5.5 5.5 (7.2) (6.0) 50.6 51.6 (5.1) (5.1) 141.9 153.3
Kuwait 0.5 0.5 11.0 7.8 (420.1) (432.2) 17.5 4.8 (487.2) (570.7)
Lebanon (1.2) (2.0) (10.5) (9.5) 132.3 141.8 (19.5) (7.3) (14.7) (9.7)
Montenegro 3.0 2.8 (3.0) (2.5) 63.1 63.2 (17.3) (15.9) 161.5 167.1
Morocco 2.8 3.7 (3.7) (3.4) 50.5 50.9 (4.9) (3.8) 26.0 23.5
Mozambique 2.5 5.0 (6.5) (5.0) 103.2 101.8 (28.9) (28.0) 278.3 279.4
Nigeria 2.0 2.2 (3.7) (3.0) 16.3 18.1 1.3 1.0 49.1 52.2
North Macedonia 3.0 3.0 (2.3) (2.5) 40.8 42.2 (2.3) (2.2) 26.8 25.0
Oman 0.5 3.0 (8.4) (8.1) 0.4 6.9 (7.1) (7.5) 26.8 32.4
Poland 4.3 3.2 (1.5) (2.5) 44.2 44.4 (0.9) (1.4) 36.3 36.0
Qatar 1.7 1.2 4.2 4.7 (97.0) (99.9) 6.8 5.0 (110.3) (114.1)
Ras Al Khaimah (Emirate of) 2.5 3.0 1.3 1.2 (5.9) (6.8) N/A N/A N/A N/A
Romania 3.9 3.5 (4.3) (4.0) 31.8 33.6 (5.1) (5.4) 36.5 40.8
Russia 1.3 1.8 1.4 0.5 3.3 2.6 4.7 4.3 (72.8) (76.5)
Rwanda 7.5 7.7 (5.5) (6.0) 44.7 47.4 (9.9) (10.2) 123.7 136.8
Saudi Arabia (0.4) 3.1 (4.8) (3.9) (72.8) (67.2) 5.5 4.7 (148.9) (151.1)
Senegal 6.1 6.4 (3.0) (3.0) 52.2 53.0 (7.5) (8.5) 127.4 127.9
Serbia 3.6 3.9 (0.5) (0.5) 46.2 45.3 (5.9) (5.7) 42.9 42.1
Sharjah (Emirate of) 2.3 2.5 (2.2) (2.9) 22.6 24.5 N/A N/A N/A N/A
South Africa 0.6 1.6 (6.0) (6.6) 57.8 61.6 (4.1) (3.9) 49.0 52.4
St. Helena 1.0 1.0 2.0 2.0 (10.7) (10.2) N/A N/A N/A N/A
Tajikistan 6.5 6.1 (3.1) (2.2) 41.3 41.5 (3.7) (2.8) 87.9 90.1
Togo 5.1 5.1 (2.5) (2.5) 60.0 58.9 (4.7) (4.6) 118.5 118.8
Turkey (0.1) 3.1 (3.2) (3.0) 28.5 28.7 (0.1) (0.8) 113.5 106.8
Uganda 5.6 6.0 (5.6) (6.0) 35.7 38.1 (9.6) (9.4) 89.7 96.0
Ukraine 3.6 3.0 (2.3) (2.1) 51.9 49.5 (2.8) (3.2) 90.7 85.8
Uzbekistan 5.5 5.5 (2.0) (1.8) 0.2 3.9 (6.3) (6.1) (37.6) (33.9)
Zambia 2.5 3.0 (7.0) (6.0) 72.9 74.2 (2.3) (2.2) 131.2 140.9

Sovereign Summaries

Abu Dhabi (AA/Stable/A-1+)

  • Analyst: Zahabia Gupta, zahabia.gupta@spglobal.com
  • Latest publication: "Summary: Abu Dhabi (Emirate of)", Nov. 29, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 1
  • External assessment: 2
  • Fiscal assessment, budget performance: 1
  • Fiscal assessment, debt: 1
  • Monetary assessment: 4
Outlook: Stable

The stable outlook on the Emirate of Abu Dhabi reflects our expectation that the country's fiscal position will remain strong over the next two years, although structural and institutional weaknesses will likely persist.

We could consider raising our ratings on Abu Dhabi if we observed pronounced improvements in data transparency, including on fiscal assets and external data, alongside further progress in institutional reforms. Furthermore, measures to improve the effectiveness of monetary policy in Abu Dhabi, such as developing domestic capital markets, could also be positive for the ratings over time.

We could consider lowering the ratings if we expect a material deterioration in Abu Dhabi's currently strong fiscal balance sheet and net external asset position. If fiscal deficits or the materialization of contingent liabilities led liquid assets to drop below 100% of GDP, pressure on the ratings would develop. We could also lower the ratings following domestic or regional events that compromised political and economic stability in Abu Dhabi.

(Originally published on Nov. 29, 2019)

Table 3

Abu Dhabi
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 98.42 76.13 71.20 76.57 90.95 86.17 86.84 85.80 85.80
GDP growth 4.39 4.93 2.56 (0.9) 1.92 1.80 2.80 2.50 2.50
GDP per capita growth (3.6) 0.11 (1.8) (0.4) 5.79 0.30 0.78 0.00 0.00
Current account balance/GDP N.A N.A N.A N.A N.A N.A N.A N.A N.A
Gross external financing needs/CAR&FXR N.A N.A N.A N.A N.A N.A N.A N.A N.A
Narrow net external debt/CAR N.A N.A N.A N.A N.A N.A N.A N.A N.A
GG balance/GDP 9.57 6.24 (0.4) 5.00 10.23 8.52 6.57 4.61 4.52
GG net debt/GDP (181.6) (228.2) (236.0) (228.3) (215.7) (227.1) (227.0) (228.8) (227.7)
CPI inflation 3.21 4.25 2.02 1.60 3.29 0.30 2.00 2.00 2.00
Bank credit to resident private sector/GDP N.A N.A N.A N.A N.A N.A N.A N.A N.A
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Albania (B+/Stable/B)

  • Analyst: Aarti Sakhuja, aarti.sakhuja@spglobal.com
  • Latest publication: "Summary: Albania", Aug. 2, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 5
  • Monetary assessment: 5
Outlook: Stable

The stable outlook reflects our view that Albania's economy will expand by about 3.5% over the next years; fiscal deficits will remain limited; and gradually narrowing current account deficits will predominantly be covered by foreign direct investment (FDI) inflows over the forecast horizon to 2022.

We could consider raising the ratings over the next two years if there is a period of sustainable economic growth, the implementation of reforms leads to significant improvements in the business environment and management of fiscal risks, FDI inflows continue, and the informal economy shrinks.

In turn, downward pressure might build on the ratings if we observed material fiscal slippages, potentially resulting from higher fiscal deficits or the materialization of contingent liabilities from public-private partnerships (PPPs). We could also lower the ratings if we assessed that the monetary policy transmission mechanisms of the Bank of Albania (BoA, the central bank) had weakened, for example due to a more prolonged period of repressed credit growth.

(Originally published on Aug. 2, 2019

Table 4

Albania
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 4.57 3.95 4.12 4.53 5.26 5.43 5.60 5.79 5.99
GDP growth 1.77 2.22 3.31 3.82 4.15 3.00 3.50 3.50 3.50
GDP per capita growth 1.96 2.45 3.68 3.79 4.37 3.10 3.60 3.60 3.60
Current account balance/GDP (10.81) (8.61) (7.57) (7.51) (6.74) (6.54) (6.32) (5.96) (5.98)
Gross external financing needs/CAR&FXR 132.86 130.43 117.07 117.10 116.24 112.67 112.78 111.08 110.36
Narrow net external debt/CAR 23.51 19.71 11.83 12.22 7.34 11.23 12.39 11.36 15.10
GG balance/GDP (5.17) (4.06) (1.81) (1.99) (1.61) (2.50) (2.00) (2.00) (2.00)
GG net debt/GDP 70.22 70.34 70.22 67.10 63.00 63.06 62.02 60.93 59.77
CPI inflation 1.63 1.90 1.28 1.99 2.03 1.60 2.00 2.20 2.40
Bank credit to resident private sector/GDP 40.12 38.09 37.10 35.37 32.60 31.81 30.88 29.93 28.94
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Angola (B-/Negative/B)

  • Analyst: Ravi Bhatia, ravi.bhatia@spglobal.com
  • Latest publication: "Summary: Angola", Aug. 9, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden: 6
  • Monetary assessment: 5
Outlook: Negative

The negative outlook reflects the possibility of a downgrade if Angola's high government debt burden or debt-servicing costs rise significantly, or if fiscal or external pressures lead to larger-than-expected fiscal deficits or a sharp deterioration in external metrics.

We could revise our outlook to stable if government reforms to the business environment were to result in significantly higher economic growth, or if fiscal balances were much stronger than forecast, helping to stabilize government debt levels.

(Originally published on Aug. 9, 2019)

Table 5

Angola
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 5.4 4.2 3.5 4.1 3.4 2.8 2.7 2.8 2.8
GDP growth 4.8 0.9 (2.6) (0.1) (1.7) 0.5 1.5 2.0 3.0
GDP per capita growth 1.2 (2.5) (5.8) (3.4) (4.8) (2.7) (1.7) (1.3) (0.3)
Current account balance/GDP (2.6) (8.8) (3.1) (0.5) 7.0 2.6 1.4 (0.6) (1.1)
Gross external financing needs/CAR&FXR 85.3 94.4 89.4 82.7 75.5 89.9 93.1 97.1 97.3
Narrow net external debt/CAR 9.5 35.3 84.0 82.7 79.2 102.4 103.2 98.4 98.4
GG balance/GDP (5.7) (2.9) (3.8) (6.3) 1.7 (0.2) (1.0) (2.0) (2.0)
GG net debt/GDP 13.0 24.2 50.0 54.1 73.1 72.1 71.0 70.2 69.4
CPI inflation 7.3 5.5 30.7 29.8 19.6 15.0 12.0 11.0 10.0
Bank credit to resident private sector/GDP 20.6 24.8 20.4 16.0 14.2 14.5 14.7 14.8 14.9
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Azerbaijan (BB+/Stable/B)

  • Analyst: Benjamin Young, benjamin.young@spglobal.com
  • Latest publication: "Summary: Azerbaijan", July 26, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 3
  • Fiscal assessment, flexibility and performance: 1
  • Fiscal assessment, debt burden:1
  • Monetary assessment: 5
Outlook: Stable

The stable outlook indicates our view of balanced risks to the ratings over the next 12 months; we expect that the authorities will continue to focus on macroeconomic stability, including fiscal management.

We could lower the ratings if Azerbaijan's economic prospects weakened compared with our present forecast. This could happen, for example, as a result of delays affecting the Shah Deniz II (SDII) gas project, leading to reduced investments and ultimately lower exports. It could also occur if oil production declined substantially faster than expected.

We could also lower the ratings if external vulnerabilities were to escalate, resulting, for instance, in a decline in central bank reserves, or if domestic political risks increased in response to a significant recent decline in real incomes, possibly restricting the government's ability to control spending.

We could consider an upgrade if there were greater diversification in the economy over time, in particular in Azerbaijan's export profile. This could potentially reduce volatility in Azerbaijan's external terms-of-trade. If this was to occur in tandem with a strengthening net external position and improved external stock data provision, then we could also consider these factors together as supportive of an upgrade.

(Originally published on July 26, 2019)

Table 6

Azerbaijan
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 7.9 5.5 3.9 4.2 4.7 4.7 4.6 4.6 4.7
GDP growth 2.8 1.1 (3.1) 0.1 1.4 2.0 1.7 3.2 2.2
GDP per capita growth 1.5 (0.1) (4.2) (1.0) 0.5 1.2 0.9 2.4 1.4
Current account balance/GDP 13.6 (0.4) (3.6) 4.1 12.9 8.8 6.1 5.8 5.8
Gross external financing needs/CAR&FXR 63.3 82.3 111.8 104.7 84.5 87.8 89.6 90.3 89.3
Narrow net external debt/CAR (84.2) (86.0) (58.4) (62.4) (59.1) (78.2) (93.1) (99.3) (100.0)
GG balance/GDP 3.4 (4.0) 0.5 0.8 7.7 8.1 2.4 1.6 1.6
GG net debt/GDP (42.5) (70.1) (51.1) (40.0) (42.2) (51.6) (54.5) (55.5) (54.8)
CPI inflation 1.4 4.0 12.4 12.9 2.3 2.9 3.3 3.6 4.1
Bank credit to resident private sector/GDP 34.6 45.3 29.2 16.2 16.4 18.5 19.8 20.6 20.8
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Bahrain (B+/Positive/B)

  • Analyst: Max McGraw, maximillian.mcgraw@spglobal.com
  • Latest publication: "Bahrain Outlook Revised To Positive On Improving Fiscal Prospects; 'B+/B' Ratings Affirmed", Nov. 29, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 4
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden: 6
  • Monetary assessment: 4
Outlook: Positive

The positive outlook signifies that we could raise our ratings on Bahrain within the next 12 months if its fiscal performance proves stronger than we currently expect. A further strengthening of foreign exchange reserves, coupled with a slowdown in foreign exchange usage triggered, for example, by an improvement in the current account, could also support an upgrade.

We could revise the outlook to stable if fiscal reform efforts slow or reverse, or if off-budget spending continues at elevated levels, boosting debt accumulation even as budget deficits decrease. We could also revise the outlook to stable if foreign exchange reserves fall more rapidly than expected. This could follow an increase in demand for foreign currency, for example, which would stress the exchange rate peg.

(Originally published on Nov. 29, 2019)

Table 7

Bahrain
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 25.4 22.7 22.7 23.5 25.1 25.5 25.8 26.2 26.5
GDP growth 4.4 2.9 3.6 3.3 2.2 2.1 2.1 2.4 2.4
GDP per capita growth (0.5) (1.3) (0.3) (2.0) 2.1 (0.9) (0.9) (0.6) (0.6)
Current account balance/GDP 4.6 (2.4) (4.6) (4.5) (5.9) (3.6) (4.1) (4.4) (4.5)
Gross external financing needs/CAR&FXR 249.2 306.1 360.4 339.3 302.7 314.5 312.0 308.3 305.6
Narrow net external debt/CAR (46.1) (51.3) (47.9) (53.4) (38.5) (36.3) (32.5) (30.5) (28.3)
GG balance/GDP (3.4) (13.0) (13.5) (10.1) (6.3) (5.7) (5.1) (5.3) (4.2)
GG net debt/GDP 17.7 33.7 45.7 53.6 63.2 67.2 70.7 73.9 76.0
CPI inflation 2.7 1.9 2.8 1.4 2.1 2.4 2.0 2.4 2.4
Bank credit to resident private sector/GDP 55.2 64.5 64.0 63.0 65.2 66.7 68.5 70.2 71.9
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Belarus (B/Stable/B)

  • Analyst: Maxim Rybnikov, maxim.rybnikov@spglobal.com
  • Latest publication: "Belarus Ratings Affirmed At 'B/B'; Outlook Stable", Oct. 4, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 2
  • Monetary assessment: 5
Outlook: Stable

The outlook is stable because we expect that Belarus' external imbalances will not escalate while its fiscal stance remains comparatively tight over the next 12 months, and that the government will retain access to international capital markets and support from Russia to refinance upcoming public debt redemptions.

We could consider lowering the ratings if worsening relations with Russia threatened the government's refinancing plans. We could also lower the ratings if contingent fiscal risks from the banking or state-owned enterprise (SOE) sectors were to crystalize on the sovereign balance sheet at higher levels than we expect.

We could raise the ratings if we saw improvement in Belarus' growth prospects, which we currently view as modest compared with other countries' at a similar level of economic development. This could be the case, for instance, if the authorities implemented a credible reform program that enhanced the business environment, facilitated foreign direct investment (FDI) inflows, and ultimately fostered the development of a competitive domestic private sector. We could also raise our ratings if the financial sector's dollarization reduced further from the current elevated levels. Upward ratings pressure may also emerge if Belarus agrees a compensation mechanism for its losses resulting from Russia's tax maneuver, thereby offsetting risks to economic growth, balance of payments, and the budgetary position.

(Originally published on Oct. 4, 2019)

Table 8

Belarus
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 8.3 5.9 5.0 5.8 6.3 6.3 6.6 6.8 6.9
GDP growth 1.7 (3.8) (2.5) 2.5 3.0 1.2 2.0 2.0 2.0
GDP per capita growth 1.6 (4.0) (2.6) 2.6 3.2 1.2 2.0 2.0 2.0
Current account balance/GDP (6.6) (3.2) (3.4) (1.7) (0.1) (2.3) (2.0) (2.0) (1.6)
Gross external financing needs/CAR&FXR 153.5 163.3 163.6 143.4 128.7 125.5 124.3 124.0 122.3
Narrow net external debt/CAR 69.6 87.8 89.5 72.7 60.1 60.6 60.3 59.8 59.3
GG balance/GDP 1.0 1.4 1.5 3.0 4.0 1.5 1.5 1.5 1.5
GG net debt/GDP 18.7 30.1 33.1 30.9 27.4 26.6 27.8 28.2 28.6
CPI inflation 18.1 13.5 11.8 6.0 4.9 5.5 5.5 6.0 6.0
Bank credit to resident private sector/GDP 43.1 46.3 42.4 40.9 40.8 41.0 41.2 41.1 41.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Benin (B+/Stable/B)

  • Analyst: Remy Carasse, remy.carasse@spglobal.com
  • Latest publication: "Benin 'B+/B' Ratings Affirmed; Outlook Stable", Dec. 20, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 5
  • Monetary assessment: 5

(Originally published on Dec. 20, 2019)

Outlook: Stable

The stable outlook balances our expectation of solid economic growth and gradual fiscal consolidation against risks of weaker reform delivery than we currently anticipate.

We could raise the ratings if the pace of Benin's economic growth is materially stronger than we currently forecast, reflecting a higher component of private sector investment and activity, and reducing net government debt as a share of GDP beyond our current projections.

We could lower the ratings on Benin if economic and fiscal reform slackens, leading, for example, to sluggish real GDP growth or to a slippage in fiscal performance. Benin's creditworthiness could also deteriorate if pressures on the West African CFA franc (XOF)-to-euro exchange rate appear. A devaluation--which we do not expect--would immediately increase government debt to GDP, weighing considerably on Benin's fiscal performance.

Table 9

Benin
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 1.3 1.1 1.1 1.1 1.2 1.2 1.3 1.4 1.5
GDP growth 6.4 1.8 3.3 5.7 6.7 6.4 6.5 6.5 6.5
GDP per capita growth 3.4 (1.0) 0.5 2.8 3.8 3.5 3.6 3.6 3.6
Current account balance/GDP (6.7) (6.0) (3.0) (4.2) (4.5) (4.8) (4.7) (4.6) (4.4)
Gross external financing needs/CAR&FXR 128.0 135.1 121.6 137.8 121.6 140.8 136.6 135.4 132.9
Narrow net external debt/CAR 32.0 32.2 50.2 49.6 79.3 85.4 86.4 84.2 80.3
GG balance/GDP (1.2) (5.6) (4.3) (4.2) (2.9) (2.5) (2.4) (2.4) (2.3)
GG net debt/GDP 14.6 22.1 28.9 32.8 32.4 32.6 32.7 32.8 32.8
CPI inflation (1.0) 0.3 (0.8) 0.1 1.0 1.0 1.0 1.0 1.0
Bank credit to resident private sector/GDP 18.4 18.5 18.6 18.0 18.0 17.6 17.2 16.8 16.4
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Bosnia and Herzegovina (B/Positive/B)

  • Analyst: Gabriel Forss, gabriel.forss@spglobal.com
  • Latest publication: "Summary: Bosnia and Herzegovina", Sept. 6, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden:1
  • Monetary assessment: 6
Outlook: Positive

The positive outlook reflects our view that, should a government be formed during the remainder of 2019, BiH's economic prospects could improve beyond our current base-case projections. Under this scenario, we anticipate authorities would regularize BiH's program status with the International Monetary Fund (IMF), which would in turn accelerate reforms and unlock financing for important infrastructure projects.

We could raise the rating on BiH over the coming 12 months if a lasting government is formed that promotes the resumption of structural reforms. Under this scenario, we would expect a reopening of dialogue with the IMF, and a firmer grasp over the financial positions of Bosnia's large public nonfinancial companies, as well as increasing steps to bringing the sizable gray economy into the taxable area.

We would revise the outlook to stable if a government is not formed and reforms are not revived.

(Originally published on Sept. 6, 2019)

Table 10

Bosnia and Herzegovina
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 5.2 4.6 4.8 5.1 5.7 5.6 5.9 6.4 6.9
GDP growth 1.2 3.1 3.1 3.2 3.1 2.5 2.6 2.7 2.8
GDP per capita growth 2.3 4.0 3.7 3.5 3.4 2.8 2.9 3.0 3.1
Current account balance/GDP (7.3) (5.3) (4.7) (4.7) (4.2) (5.4) (5.7) (5.7) (5.5)
Gross external financing needs/CAR&FXR 143.2 137.3 131.9 129.1 130.1 133.8 130.2 129.9 129.5
Narrow net external debt/CAR 40.6 38.2 31.5 24.5 17.9 20.6 22.0 22.6 22.7
GG balance/GDP (2.0) 0.7 1.2 2.6 2.2 1.0 0.5 (0.5) (0.5)
GG net debt/GDP 34.7 34.5 32.6 26.8 23.6 22.6 22.1 21.6 21.6
CPI inflation (0.9) (1.0) (1.1) 1.2 1.4 1.3 1.4 1.5 1.5
Bank credit to resident private sector/GDP 54.9 53.9 53.4 54.7 55.1 56.0 56.7 57.2 57.8
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Botswana (A-/Stable/A-2)

  • Analyst: Ludwig Heinz, ludwig.heinz@spglobal.com
  • Latest publication: "Botswana 'A-/A-2' Ratings Affirmed; Outlook Stable", Oct. 25, 2019
Rating assessment snapshot
  • Institutional assessment: 3
  • Economic assessment: 5
  • External assessment: 1
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 1
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that Botswana's sound fiscal and external balance sheets will continue to shield the economy from diamond sector volatility. It also reflects our view of Botswana's continued fiscal prudence, which will allow the government to reduce budget deficits in the medium term.

We could lower the ratings on Botswana if we observed a fiscal deterioration beyond our current expectations coupled with rapid government debt accumulation, or if the external position were to weaken significantly. These scenarios could materialize if the government's fiscal consolidation efforts prove challenging and/or if weakness in the global diamond market persists due to a softer global economy or structural shifts in global consumer preferences.

We could raise the ratings on Botswana if the economy's growth rates significantly outperform those of peers at a similar stage of economic development, or if its economic structure were to become significantly more diversified. However, we view this scenario as highly unlikely over the next two-to-three years.

(Originally published on Oct. 25, 2019)

Table 11

Botswana
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 7.5 6.5 7.0 7.6 8.0 7.9 8.2 8.6 9.1
GDP growth 4.2 (1.7) 4.3 2.9 4.5 4.1 4.3 4.1 4.1
GDP per capita growth 2.2 (3.5) 2.4 1.1 2.4 2.1 2.3 2.1 2.1
Current account balance/GDP 10.7 2.2 7.8 5.3 1.9 1.9 1.6 2.7 3.9
Gross external financing needs/CAR&FXR 57.5 57.5 55.9 54.5 59.3 61.9 63.5 64.3 63.8
Narrow net external debt/CAR (54.0) (62.5) (52.9) (65.0) (56.7) (48.9) (43.7) (39.0) (35.2)
GG balance/GDP 3.7 (4.8) 0.7 (1.1) (3.3) (3.0) (1.5) (1.0) (0.2)
GG net debt/GDP (9.4) (7.7) (3.3) (4.9) (1.4) 1.7 3.1 3.8 3.7
CPI inflation 4.4 3.0 2.8 3.3 3.2 3.1 3.5 3.6 3.6
Bank credit to resident private sector/GDP 33.7 36.7 33.3 33.1 33.7 33.5 33.4 33.3 33.2
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Bulgaria (BBB/Positive/A-2)

  • Analyst: Ludwig Heinz, ludwig.heinz@spglobal.com
  • Latest publication: "Ratings On Bulgaria Raised To 'BBB/A-2' From 'BBB-/A-3' On Solid Macroeconomic Fundamentals; Outlook Positive", Nov. 29, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment, flexibility and performance: 1
  • Fiscal assessment, debt burden:1
  • Monetary assessment: 5
Outlook: Positive

The positive outlook reflects Bulgaria's progressively strengthening fiscal and external position, which we project to continue as the country grows resiliently in a weaker external economy.

We could raise the ratings if Bulgaria's economy continues to grow resiliently without reversing fiscal gains or if the country's external performance strengthened beyond our expectations. We could also raise the ratings if Bulgaria further entrenches structural and institutional improvements, for example on its path toward euro adoption.

We could revise the outlook to stable if we observed external financing pressures or the buildup of significant macroeconomic imbalances.

(Originally published on Nov. 29, 2019)

Table 12

Bulgaria
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 7.9 7.0 7.5 8.3 9.4 9.6 10.2 11.1 12.3
GDP growth 1.9 4.0 3.8 3.5 3.1 3.6 3.0 2.9 2.9
GDP per capita growth 2.4 4.6 4.5 4.3 3.8 4.1 3.4 3.3 3.3
Current account balance/GDP 1.2 (0.0) 2.6 3.1 4.6 0.8 (0.3) (0.6) (0.8)
Gross external financing needs/CAR&FXR 120.2 118.9 108.1 100.1 100.1 105.1 104.6 103.8 103.7
Narrow net external debt/CAR (3.2) (16.2) (24.2) (30.0) (32.5) (37.1) (42.1) (45.0) (46.5)
GG balance/GDP (5.4) (1.7) 0.1 1.1 1.8 0.1 0.0 0.2 0.2
GG net debt/GDP 17.4 18.1 16.9 14.7 12.6 11.6 11.0 10.2 9.4
CPI inflation (1.6) (1.1) (1.3) 1.2 2.6 2.5 2.2 2.2 2.2
Bank credit to resident private sector/GDP 61.7 57.0 54.5 52.9 53.7 52.9 52.6 52.3 52.0
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Burkina Faso (B/Stable/B)

  • Analyst: Sebastien Boreux, sebastien.boreux@spglobal.com
  • Latest publication: "Summary: Burkina Faso", Nov. 15, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 5
  • Fiscal assessment, debt burden: 2
  • Monetary assessment: 5
Outlook: Stable

The stable outlook on Burkina Faso balances our expectation of continued political stability, gradual fiscal consolidation, and further broad-based economic growth over the next 12 months, against risks of weakening economic and budgetary performance.

Rating pressure could materialize if Burkina Faso proves unable to consolidate the institutional progress it has made or if the government fails to reduce its fiscal deficit. We could also lower our ratings if constraints on the WAEMU international reserves or on the West African CFA franc (XOF) to euro exchange rate were to emerge.

We could raise the ratings if the pace of Burkina Faso's economic growth is significantly stronger than we currently forecast, or if external and fiscal deficits and net government debt as a share of GDP were to fall.

(Originally published on Nov. 15, 2019)

Table 13

Burkina Faso
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 0.7 0.6 0.6 0.6 0.7 0.7 0.7 0.8 0.9
GDP growth 4.3 3.9 5.9 6.4 6.8 6.0 6.3 6.3 6.3
GDP per capita growth 0.8 0.5 3.1 3.1 3.6 2.8 3.1 3.1 3.1
Current account balance/GDP (8.1) (8.6) (6.8) (7.1) (6.8) (7.0) (7.2) (6.9) (6.7)
Gross external financing needs/CAR&FXR 142.1 143.9 137.5 140.2 140.1 139.0 138.5 136.9 136.1
Narrow net external debt/CAR 61.3 60.0 47.8 62.2 59.0 66.3 69.4 70.2 70.3
GG balance/GDP (2.2) (1.4) (3.4) (7.8) (4.9) (3.0) (3.5) (3.0) (3.0)
GG net debt/GDP 26.0 29.4 30.0 31.4 35.8 36.6 37.7 38.1 38.5
CPI inflation (0.3) 1.0 (0.2) 0.4 1.9 1.3 1.3 2.0 2.0
Bank credit to resident private sector/GDP 29.6 32.5 33.0 33.0 33.9 34.5 35.0 35.5 36.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Cameroon (B/Negative/B)

  • Analyst: Sebastien Boreux, sebastien.boreux@spglobal.com
  • Latest publication: "Summary: Cameroon", Oct. 11, 2019
Rating assessment snapshot
  • Institutional assessment: 6
  • Economic assessment: 5
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 4
  • Fiscal assessment, debt burden: 3
  • Monetary assessment: 5
Outlook: Negative

The negative outlook signifies that we could lower the ratings on Cameroon over the next six months if:

  • Fiscal deficits or net general government debt as a percentage of GDP exceed our forecasts;
  • External pressures heighten beyond our expectations; or
  • The sociopolitical environment deteriorates materially, leading for example to constraints on the government's funding access.

We could revise the outlook to stable if sociopolitical tensions ease, fiscal deficits and net GG debt as a percentage of GDP decreases, and external pressures reduce thanks to, for example, higher-than-expected gas production in the medium term.

(Originally published on Oct. 11, 2019)

Table 14

Cameroon
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 1.6 1.4 1.4 1.5 1.6 1.5 1.6 1.7 1.8
GDP growth 5.9 5.7 4.7 3.6 4.1 4.0 4.0 4.0 4.0
GDP per capita growth 3.1 2.9 2.0 0.9 1.4 1.3 1.3 1.3 1.3
Current account balance/GDP (4.0) (3.8) (3.2) (3.4) (3.5) (3.5) (3.5) (3.4) (3.2)
Gross external financing needs/CAR&FXR 95.8 93.6 89.5 103.8 97.0 96.3 99.1 101.2 102.6
Narrow net external debt/CAR 24.9 39.7 68.4 77.1 81.4 95.4 106.7 115.6 122.3
GG balance/GDP (4.2) (4.4) (6.1) (4.9) (2.5) (3.0) (3.0) (2.8) (2.5)
GG net debt/GDP 16.2 19.7 23.4 24.3 28.8 31.3 33.1 34.6 35.3
CPI inflation 1.9 2.7 0.9 0.6 1.1 2.0 2.0 2.0 2.0
Bank credit to resident private sector/GDP 17.6 18.9 19.6 17.5 18.8 18.8 19.0 19.3 19.6
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Cape Verde (B/Stable/B)

  • Analyst: Ravi Bhatia, ravi.bhatia@spglobal.com
  • Latest publication: "Summary: Cape Verde", Aug. 30, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 4
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 5
Outlook: Stable

The stable outlook indicates that, at least over the next 12 months, the risks of a weaker fiscal trajectory and balance-of-payments performance will likely be offset by reasonably strong economic growth.

S&P Global Ratings could lower the ratings if Cape Verde's balance of payments weakened more than it currently projects, for example, if the tourism sector deteriorated or there was additional pressure on foreign currency reserves. We could also lower the ratings if net government debt materially worsened relative to our forecasts, or donor support dwindled.

We could raise the ratings if fiscal pressures were to reduce materially, supported by a credible fiscal adjustment effort that sees the country's public debt on a firm downward path and comprehensively addresses the financial issues faced by several state-owned enterprises. We could also consider a positive rating action if external pressures were to dissipate, for example, due to consistent, broad-based and significantly stronger-than-anticipated GDP growth.

(Originally published on Aug. 30, 2019)

Table 15

Cape Verde
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 3.5 3.0 3.1 3.2 3.6 3.6 3.7 4.0 4.4
GDP growth 0.6 1.0 4.7 3.7 5.1 5.2 4.7 4.8 4.7
GDP per capita growth (0.6) (0.2) 3.4 2.4 3.8 4.0 3.5 3.6 3.5
Current account balance/GDP (9.1) (3.2) (3.9) (7.8) (5.3) (5.4) (5.0) (4.6) (4.2)
Gross external financing needs/CAR&FXR 158.8 145.5 135.8 136.8 137.4 135.3 132.8 129.8 127.1
Narrow net external debt/CAR 96.6 115.1 96.7 105.4 93.2 89.9 82.8 75.2 67.8
GG balance/GDP (7.8) (4.0) (3.5) (3.1) (2.6) (3.0) (2.8) (2.6) (2.4)
GG net debt/GDP 98.7 106.0 105.2 103.4 106.4 105.6 103.1 100.2 97.2
CPI inflation (0.3) 0.2 (1.4) 0.8 1.3 1.4 1.6 1.8 1.8
Bank credit to resident private sector/GDP 63.6 63.6 63.1 64.6 62.5 60.9 59.8 58.6 57.5
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Congo (B-/Stable/B)

  • Analyst: Sebastien Boreux, sebastien.boreux@spglobal.com
  • Latest publication: "Summary: Congo-Brazzaville", Sept. 6, 2019
Rating assessment snapshot
  • Institutional assessment: 6
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 6
  • Monetary assessment: 5
Outlook: Stable

The stable outlook balances on one hand our expectation that external and fiscal pressures will keep decreasing over the next 12 months, notably thanks to the financial support of development partners, against on the other hand continuous institutional and economic risks.

We could lower our ratings if, for example, new claims made under foreign laws or institutional mismanagement hinder full and timely payment to investors, or if external and fiscal pressures increase significantly.

We could raise the ratings if Congo's external and fiscal accounts perform well above our expectations, for example thanks to significantly improved oil or non-oil economic growth, and if legal and institutional risks of default dissipate.

(Originally published on Sept. 6, 2019)

Table 16

Congo
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 2.9 1.7 1.5 1.7 1.9 1.8 1.7 1.7 1.7
GDP growth 6.8 2.8 (2.8) (3.1) 2.0 5.0 1.0 1.0 (0.5)
GDP per capita growth 4.2 0.3 (5.3) (5.6) (0.5) 2.3 (1.6) (1.6) (3.0)
Current account balance/GDP 4.8 (54.2) (63.5) (5.9) 6.8 5.4 2.7 1.0 (4.6)
Gross external financing needs/CAR&FXR 61.9 102.0 162.8 121.6 106.5 106.9 105.9 104.3 106.3
Narrow net external debt/CAR (13.9) 91.0 200.0 162.4 110.1 96.8 86.5 75.5 72.1
GG balance/GDP (6.6) (11.9) (8.8) (4.7) 6.8 7.0 6.0 5.0 6.0
GG net debt/GDP 16.7 40.6 92.2 109.5 97.3 88.5 82.4 77.7 73.7
CPI inflation 0.9 3.2 3.2 0.5 1.2 2.0 2.5 2.7 3.0
Bank credit to resident private sector/GDP 14.6 24.1 27.7 23.9 20.1 20.5 21.0 21.9 23.3
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Congo, D.R. (CCC+/Positive/C)

  • Analyst: Sebastien Boreux, sebastien.boreux@spglobal.com
  • Latest publication: "Democratic Republic of Congo Outlook To Positive On Possible End Of Political Impasse; 'CCC+/C' Ratings Affirmed", Aug. 2, 2019
Rating assessment snapshot
  • Institutional assessment: 6
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 4
  • Fiscal assessment, debt burden:2
  • Monetary assessment: 6
Outlook: Positive

The positive outlook signifies that we could raise the ratings on DR Congo over the next 12 months if the new administration proves to be successful in securing sufficient external financial support from international partners and continues to make payments on commercial debt on time and in full.

We could revise the outlook to stable if domestic tensions escalate, threatening DR Congo's already-weak institutions and fragile economy. Given the country's low buffers, we could also revise the outlook to stable if external pressures rise beyond our current expectations.

(Originally published on Aug. 2, 2019)

Table 17

Congo, D.R.
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.7
GDP growth 9.5 6.9 2.4 3.7 5.8 4.5 4.1 4.1 4.1
GDP per capita growth 5.9 3.5 (0.9) 0.4 2.4 1.2 0.8 0.8 0.8
Current account balance/GDP (4.8) (3.9) (4.1) (3.3) (4.6) (4.0) (4.2) (4.4) (4.5)
Gross external financing needs/CAR&FXR 104.4 103.9 106.3 108.1 111.2 110.2 107.8 106.6 105.9
Narrow net external debt/CAR 15.5 18.9 19.4 17.2 18.5 13.9 13.2 12.9 12.9
GG balance/GDP 0.4 (0.3) (1.1) 0.3 (0.1) (0.5) (0.8) (0.8) (0.8)
GG net debt/GDP 11.6 11.2 14.1 14.1 10.4 10.8 11.2 11.6 11.9
CPI inflation 1.2 0.7 2.9 33.9 33.2 6.5 5.0 5.0 5.0
Bank credit to resident private sector/GDP 6.0 6.5 7.8 5.8 6.3 6.3 6.3 6.3 6.4
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Croatia (BBB-/Stable/A-3)

  • Analyst: Ludwig Heinz, ludwig.heinz@spglobal.com
  • Latest publication: "Summary: Croatia", Sept. 20, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment, flexibility and performance: 2
  • Fiscal assessment, debt burden: 5
  • Monetary assessment: 4
Outlook: Stable

The stable outlook balances the potential for reforms leading to faster income convergence with wealthier trading partners against risks emanating from external uncertainties.

We could raise the ratings over the next two-to-three years if Croatia's economic growth proves resilient to Europe's cyclical slowdown, allowing continued convergence with EU average income levels, and possibly aided by the removal of structural impediments to growth. If public debt reduced faster than we currently anticipate, this could also prove positive for the ratings.

We could lower the ratings if we observed a material economic downturn, possibly due to a significant weakening in the external environment, which would reverse recent fiscal gains. An emergence of higher-than-expected contingent liabilities could also put pressure on the ratings if these liabilities were a sizable fiscal drain or a drag on the economy.

(Originally published on Sept. 20, 2019)

Table 18

Croatia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 13.6 11.8 12.4 13.4 14.9 14.8 15.3 16.4 17.7
GDP growth (0.1) 2.4 3.5 3.1 2.6 2.9 2.5 2.4 2.4
GDP per capita growth 0.3 3.3 4.2 4.4 3.5 3.4 2.9 2.6 2.6
Current account balance/GDP 1.9 4.6 2.6 3.9 2.3 0.8 0.4 0.3 0.4
Gross external financing needs/CAR&FXR 100.7 92.7 92.2 86.5 84.2 81.9 80.0 80.5 81.2
Narrow net external debt/CAR 99.1 90.8 71.4 58.3 40.0 33.1 32.1 30.0 27.9
GG balance/GDP (5.4) (3.3) (1.1) 0.8 0.3 (0.1) (0.4) (0.3) (0.3)
GG net debt/GDP 74.6 76.1 74.7 71.8 68.9 66.0 63.7 61.5 59.3
CPI inflation (0.2) (0.5) (1.1) 1.1 1.5 1.1 1.8 1.8 1.8
Bank credit to resident private sector/GDP 70.7 67.3 62.9 59.2 57.7 57.4 57.3 57.2 57.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Egypt (B/Stable/B)

  • Analyst: Zahabia Gupta, zahabia.gupta@spglobal.com
  • Latest publication: "Summary: Egypt", Nov. 8, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 4
Outlook: Stable

The stable outlook balances S&P Global Ratings' expectation that Egypt's current account deficits will remain broadly stable as a percentage of GDP and that growth prospects will remain strong, against risks of fiscal slippages and an increase in the already-large stock of relatively short-dated government debt issued at high interest rates.

We could consider a positive rating action if Egypt's economic expansion significantly outperforms our forecasts, and if larger-than-anticipated improvements in the current account position sharply reduce Egypt's external financing requirements and external debt levels. We could also consider a positive action if Egypt's reform program materially reduces government debt while it maintains a track record of stronger governance.

Rating pressure could emerge if Egypt's plan to gradually reduce the government debt-to-GDP ratio is derailed by fiscal slippages, higher borrowing costs, more pronounced currency depreciation than expected, or if foreign exchange reserve levels were to fall markedly. We could also see rating constraints from a worsening in the security situation, hindering the recovery in investment and tourism.

(Originally published on Nov. 8, 2019)

Table 19

Egypt
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 3.5 3.7 3.7 2.5 2.6 3.1 3.6 4.0 4.3
GDP growth 2.9 4.4 4.4 4.2 5.3 5.6 5.7 5.6 5.5
GDP per capita growth 0.3 1.8 2.1 (0.4) 3.3 4.5 3.1 3.0 2.9
Current account balance/GDP (0.9) (3.7) (6.0) (6.1) (2.4) (2.1) (2.1) (2.1) (2.2)
Gross external financing needs/CAR&FXR 103.4 110.2 117.3 121.2 112.6 110.2 108.1 105.7 105.1
Narrow net external debt/CAR 21.5 27.9 60.4 67.6 68.8 79.9 76.6 73.7 70.7
GG balance/GDP (12.1) (11.6) (13.7) (10.6) (9.6) (8.2) (7.8) (6.8) (6.4)
GG net debt/GDP 77.9 78.7 84.7 88.8 81.8 77.6 76.9 75.9 74.7
CPI inflation 10.1 11.0 10.2 23.3 21.6 13.9 9.8 9.5 9.5
Bank credit to resident private sector/GDP 27.7 28.2 29.8 32.7 28.1 25.9 26.4 27.2 28.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Ethiopia (B/Stable/B)

  • Analyst: Zahabia Gupta, zahabia.gupta@spglobal.com
  • Latest publication: "Summary: Ethiopia", Sept. 27, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:3
  • Monetary assessment: 5
Outlook: Stable

The stable outlook balances our expectation that economic growth in Ethiopia will remain robust, which will help to stabilize government debt levels, against the risk of rising public debt and its servicing costs.

We could lower the ratings if slower fiscal consolidation or the crystallization of contingent liabilities caused government debt (net of liquid assets) to accumulate more quickly, and if debt-servicing costs rose beyond our expectations. We could also lower the ratings if the government were to continue to restructure noncommercial debt, weakening our assessment of the debt payment culture.

We could raise the ratings if wealth levels in the country materially increased; government debt accumulated more slowly than we currently project; and if foreign exchange restrictions were removed, reflecting improvements in the external position and the monetary framework.

(Originally published on Sept. 27, 2019)

Table 20

Ethiopia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 0.6 0.7 0.8 0.9 0.9 1.0 1.0 1.1 1.2
GDP growth 10.3 10.4 7.6 10.2 6.8 7.8 7.5 7.0 7.0
GDP per capita growth 7.5 7.8 5.1 7.6 4.5 5.3 5.0 4.5 4.5
Current account balance/GDP (10.4) (13.9) (11.0) (9.8) (7.8) (6.9) (6.8) (6.5) (6.1)
Gross external financing needs/CAR&FXR 137.7 160.3 145.9 147.5 137.9 137.1 138.1 142.8 144.8
Narrow net external debt/CAR 104.9 144.7 145.2 172.7 174.0 175.6 188.8 197.5 205.9
GG balance/GDP (2.6) (2.4) (1.9) (3.3) (3.0) (3.2) (3.2) (3.0) (3.0)
GG net debt/GDP 21.2 21.6 22.8 25.4 28.3 27.2 28.4 29.6 30.6
CPI inflation 8.1 7.7 9.7 7.2 13.1 15.4 10.0 8.5 8.5
Bank credit to resident private sector/GDP 28.2 30.8 30.9 33.0 34.2 35.5 37.9 41.0 44.4
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Georgia (BB/Stable/B)

  • Analyst: Aarti Sakhuja, aarti.sakhuja@spglobal.com
  • Latest publication: "Georgia Ratings Raised To 'BB' On Improved Economic Resilience; Outlook Stable", Oct. 11, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment:5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden:2
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects the balance of risks between the potential for some erosion of institutional checks-and-balances and external vulnerabilities on the one hand, and upside to Georgia's growth prospects on the other.

We could raise the ratings if Georgia's growth rates translate into higher income levels while its exports profile diversifies further, both in terms of product and geography.

Downward ratings pressure could build if Georgia's institutional arrangements weakened and led to less predictable policymaking, as well as hurting business confidence and growth prospects.

(Originally published on Oct. 11, 2019)

Table 21

Georgia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 4.4 3.8 3.9 4.0 4.3 4.3 4.5 4.7 5.0
GDP growth 4.6 2.9 2.9 4.8 4.7 4.5 4.0 4.0 4.0
GDP per capita growth 4.7 2.7 2.7 4.9 4.6 4.7 4.0 4.0 4.0
Current account balance/GDP (10.8) (12.6) (13.1) (8.7) (7.4) (6.5) (6.4) (6.3) (6.0)
Gross external financing needs/CAR&FXR 114.6 118.7 125.0 119.3 119.1 118.0 116.6 115.3 114.6
Narrow net external debt/CAR 72.5 95.2 104.9 90.7 83.3 86.7 85.0 82.6 80.2
GG balance/GDP (2.7) (2.5) (2.8) (3.2) (2.3) (2.5) (2.8) (2.5) (2.5)
GG net debt/GDP 31.6 37.1 40.1 39.9 40.3 42.2 43.2 43.4 43.0
CPI inflation 3.1 4.0 2.1 6.0 2.6 4.0 3.0 3.0 3.0
Bank credit to resident private sector/GDP 45.6 50.2 57.0 59.1 64.7 67.4 71.1 76.4 82.7
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Ghana (B/Stable/B)

  • Analyst: Ravi Bhatia, ravi.bhatia@spglobal.com
  • Latest publication: "Summary: Ghana", Sept. 13, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 4
Outlook: Stable

The stable outlook balances Ghana's fairly strong growth prospects and relatively narrow current account deficits against risks from still-large budget deficits and a high stock of general government debt.

S&P Global Ratings could lower the rating if fiscal deficits were materially larger than we expected, resulting in high debt levels.

We could also lower the rating if external pressures mounted--for example, if the cedi saw stronger depreciation and inflation rose, triggering higher-than-expected outflows of nonresident capital. It could also occur if we saw a risk of a material deterioration in monetary policy.

We could consider raising our ratings if Ghana implements and adheres to measures that alleviate pressure on public finances more than we currently predict, without weakening the government's capacity to maintain balanced economic growth.

We also see prospects for an upgrade if, alongside fiscal consolidation, external debt and gross external financing needs reduce significantly.

(Originally published on Sept. 13, 2019)

Table 22

Ghana
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 2.0 1.8 2.0 2.0 2.2 2.3 2.3 2.4 2.4
GDP growth 2.9 2.2 3.5 8.1 6.3 6.5 5.7 4.6 5.1
GDP per capita growth 0.6 (0.1) 1.2 5.8 4.0 4.2 3.4 2.3 2.8
Current account balance/GDP (6.9) (5.7) (5.2) (3.4) (3.2) (2.1) (2.2) (2.9) (3.0)
Gross external financing needs/CAR&FXR 125.5 125.1 131.1 122.4 119.8 127.9 125.2 125.1 124.6
Narrow net external debt/CAR 118.4 128.1 135.2 125.8 119.1 124.5 126.2 131.8 133.8
GG balance/GDP (7.4) (5.4) (7.9) (4.8) (7.4) (6.2) (5.2) (4.0) (4.0)
GG net debt/GDP 47.2 52.3 52.8 51.3 54.1 55.9 56.2 56.2 56.1
CPI inflation 15.4 17.2 17.5 12.4 9.8 9.6 9.3 9.0 9.0
Bank credit to resident private sector/GDP 14.5 16.1 15.3 15.3 12.6 11.7 11.2 11.0 10.7
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Hungary (BBB/Stable/A-2)

  • Analyst: Karen Vartapetov, karen.vartapetov@spglobal.com
  • Latest publication: "Summary: Hungary", Aug. 16, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment, flexibility and performance: 2
  • Fiscal assessment, debt burden:4
  • Monetary assessment: 3
Outlook: Stable

The stable outlook balances risks to Hungary's competitiveness from an overheating labor market against prospects of further economic convergence with wealthier trading partners.

We could raise the ratings in the next 24 months if Hungary's economic performance continues to be stronger and more balanced than peers'. Potential for ratings upside could also build should Hungary's net public and external debt decline faster than we currently expect, for example, if the government were to run budgetary surpluses.

We could take a negative rating action over the coming 24 months in the event of a significant external shock to Hungary's open economy or an unexpected deterioration in external financing, including a suspension of EU transfers, or recurring weakness in Hungary's public finances that fuels public debt.

(Originally published on Aug. 16, 2019)

Table 23

Hungary
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 14.2 12.6 13.0 14.4 16.1 16.6 17.2 17.7 18.3
GDP growth 4.2 3.9 2.2 4.3 5.1 4.8 3.2 2.1 2.0
GDP per capita growth 4.5 4.1 2.5 4.7 5.3 5.0 3.4 2.3 2.2
Current account balance/GDP 1.5 2.8 6.2 2.8 0.4 0.3 0.5 0.5 0.5
Gross external financing needs/CAR&FXR 104.6 101.7 98.5 103.0 105.0 102.1 99.2 98.8 98.9
Narrow net external debt/CAR 43.0 39.0 32.3 30.4 22.5 18.6 16.0 15.0 14.5
GG balance/GDP (2.8) (2.0) (1.8) (2.4) (2.3) (1.8) (1.2) (2.0) (2.0)
GG net debt/GDP 72.9 73.4 71.1 70.0 66.3 63.5 61.0 60.0 59.2
CPI inflation 0.0 0.1 0.5 2.4 2.9 3.2 3.2 3.0 3.0
Bank credit to resident private sector/GDP 48.5 42.0 41.4 38.9 39.4 40.0 40.2 40.4 40.7
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Iraq (B-/Stable/B)

  • Analyst: Max McGraw, maximillian.mcgraw@spglobal.com
  • Latest publication: "Iraq Ratings Affirmed At 'B-/B'; Outlook Stable", Aug. 23, 2019
Rating assessment snapshot
  • Institutional assessment: 6
  • Economic assessment: 6
  • External assessment: 3
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:4
  • Monetary assessment: 6
Outlook: Stable

The stable outlook reflects our opinion that risks from Iraq's expansionary fiscal position will be contained, to some extent, given that spending is limited by the government's ability to finance it.

We could lower the ratings if the government increased spending beyond our expectations, resulting in either a decline in foreign currency reserves or a sharp rise in its net debt and debt-servicing costs. This could also occur if oil revenue fell further than we expect and the government was unable to cut expenditure or implement countermeasures.

We do not expect to raise the ratings over the next 12 months, but we could over the forecast period if higher-than-expected nonoil growth, for instance from reinvigorated reconstruction efforts, resulted in an increase in Iraq's economic growth and higher GDP per capita.

(Originally published on Aug. 23, 2019)

Table 24

Iraq
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 6.5 4.6 4.5 5.0 5.4 5.2 5.3 5.4 5.5
GDP growth 2.3 2.6 13.8 (3.8) (1.0) 3.0 4.3 2.5 2.5
GDP per capita growth (1.0) (0.6) 10.5 (6.5) (3.8) 0.1 1.3 (0.4) (0.4)
Current account balance/GDP 6.9 (1.7) 1.3 7.8 16.6 9.4 8.4 4.8 4.8
Gross external financing needs/CAR&FXR 81.3 105.2 105.6 105.4 72.7 77.0 77.0 82.4 82.6
Narrow net external debt/CAR (32.7) 2.0 23.1 18.5 (7.7) (7.2) (6.9) (3.3) (1.1)
GG balance/GDP (5.5) (13.7) (14.6) (1.7) 8.3 (4.9) (4.8) (5.0) (5.0)
GG net debt/GDP 25.4 50.0 58.3 50.7 35.0 40.3 42.7 45.9 48.9
CPI inflation 2.2 1.4 (0.7) 0.2 0.4 2.0 2.0 2.0 2.0
Bank credit to resident private sector/GDP 9.6 13.6 13.5 12.3 11.6 12.4 12.2 12.2 12.3
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Israel (AA-/Stable/A-1+)

  • Analyst: Karen Vartapetov, karen.vartapetov@spglobal.com
  • Latest publication: "Summary: Israel", Aug. 2, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 1
  • External assessment: 1
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden:3
  • Monetary assessment: 2
Outlook: Stable

The stable outlook on Israel balances external and security risks against Israel's solid economic growth prospects. The outlook also factors in our view that Israel's net creditor position will remain about 38% of GDP over our forecast horizon through 2022, providing the economy with substantial buffers in the event of an external shock.

We could take a negative rating action if Israel's economic, balance-of-payments, or fiscal performance weakened markedly compared with our forecast, or if security risks increased substantially.

A positive rating action could stem from strong fiscal consolidation efforts that result in a material reduction in the net general government debt-to-GDP ratio or interest payments, or a major, unexpected improvement in the Middle East's security environment.

(Originally published on Aug. 2, 2019)

Table 25

Israel
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 37.7 35.9 37.4 40.5 41.6 42.6 46.0 47.9 49.6
GDP growth 3.9 2.6 4.0 3.5 3.3 3.1 3.2 3.1 3.0
GDP per capita growth 1.9 0.6 2.0 1.5 1.3 1.2 1.2 1.2 1.1
Current account balance/GDP 4.4 5.2 3.7 2.9 2.6 2.6 2.7 2.6 2.7
Gross external financing needs/CAR&FXR 75.7 70.5 68.8 69.8 66.3 65.8 65.3 65.2 65.8
Narrow net external debt/CAR (24.6) (34.7) (39.1) (54.9) (47.3) (49.7) (48.6) (46.6) (44.2)
GG balance/GDP (2.7) (1.6) (1.9) (1.9) (3.8) (3.6) (3.2) (2.8) (2.8)
GG net debt/GDP 63.4 61.0 59.1 57.5 58.2 58.9 59.0 58.8 58.5
CPI inflation 0.5 (0.6) (0.5) 0.2 0.8 1.3 1.6 1.8 1.8
Bank credit to resident private sector/GDP 77.0 74.9 73.4 73.8 74.9 75.1 75.1 75.1 75.2
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Jordan (B+/Stable/B)

  • Analyst: Zahabia Gupta, zahabia.gupta@spglobal.com
  • Latest publication: "Jordan Ratings Affirmed At 'B+/B'; Outlook Remains Stable", Sept. 13, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 2
  • Fiscal assessment, debt burden: 5
  • Monetary assessment: 4
Outlook: Stable

The stable outlook balances our expectation that, over the next 12 months, donor funding will continue to support the government's financing needs and keep debt-servicing costs low, against the risk that the government will significantly increase spending to alleviate social and economic challenges.

We could lower our ratings on Jordan if we saw higher debt accumulation by the central government or state-owned enterprises (SOEs), such as National Electric Power Company (NEPCO). We could also lower the ratings if funding sources became strained, for example if strong bilateral and multilateral donor support were to diminish.

We could raise the ratings if Jordan's external imbalances narrowed, supported by a more diversified export base, and if foreign investment were to rebound markedly, boosting foreign exchange reserves. We could also see ratings upside stem from the government's fiscal and energy reforms if it manages to reduce net government debt levels faster than anticipated while maintaining low borrowing costs.

(Originally published on Sept. 13, 2019)

Table 26

Jordan
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 4.1 4.0 4.0 4.0 4.1 4.1 4.2 4.3 4.4
GDP growth 3.4 2.6 2.1 2.1 1.9 2.2 2.5 2.8 3.0
GDP per capita growth (4.7) (5.5) (0.4) (1.0) (0.8) (0.5) (0.2) 0.1 0.2
Current account balance/GDP (7.2) (9.0) (9.4) (10.6) (6.8) (7.7) (7.5) (7.3) (6.8)
Gross external financing needs/CAR&FXR 144.6 145.8 148.3 157.6 150.4 159.6 160.3 159.8 159.2
Narrow net external debt/CAR 9.9 16.1 22.1 30.6 42.3 49.6 53.4 57.5 60.4
GG balance/GDP (6.2) (0.7) (0.1) 0.5 (0.2) (0.4) (0.3) (0.2) (0.2)
GG net debt/GDP 62.4 65.0 65.5 64.4 62.8 63.2 62.2 61.0 59.5
CPI inflation 2.9 (0.9) (0.8) 3.3 4.5 0.1 3.0 2.5 2.5
Bank credit to resident private sector/GDP 71.5 71.0 76.5 80.8 82.3 85.1 87.5 89.9 92.0
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Kazakhstan (BBB-/Stable/A-3)

  • Analyst: Max McGraw, maximillian.mcgraw@spglobal.com
  • Latest publication: "Kazakhstan 'BBB-/A-3' Ratings Affirmed; Outlook Stable", Sept. 6, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment, flexibility and performance: 1
  • Fiscal assessment, debt burden:2
  • Monetary assessment: 4
Outlook: Stable

The outlook is stable because we expect Kazakhstan's government and external balance sheets will remain robust over the next two years. We also expect continuity of policy-making under the new President.

We could raise the ratings if we see significant and tangible devolution of power to the cabinet and parliament along the lines suggested by the March 2017 constitutional amendments, which could support an improvement in policy-making effectiveness, in our view.

A meaningful improvement in the health of the banking sector, for example supported by further advances in regulatory oversight or reduced concentration in lending to single borrowers, could also improve our view on government and monetary policy effectiveness.

A prolonged and sharp fall in oil prices or production, beyond our expectations, could put the ratings under pressure if it led to deterioration of Kazakhstan's external performance, for example should gross external financing needs exceed 100% of current account receipts plus usable reserves. We could also consider a downgrade if destabilizing factors re-emerged, such as a spike in dollarization of resident deposits.

(Originally published on Sept. 6, 2019)

Table 27

Kazakhstan
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 12.9 10.4 7.7 9.0 9.4 8.8 9.1 9.4 9.7
GDP growth 4.2 1.2 1.1 4.1 4.1 4.0 3.8 3.7 3.7
GDP per capita growth 2.7 (1.7) (0.3) 2.7 2.8 2.7 2.5 2.4 2.4
Current account balance/GDP 2.8 (3.3) (5.9) (3.1) (0.0) (1.5) (1.1) (0.8) (0.6)
Gross external financing needs/CAR&FXR 93.4 109.9 100.9 94.3 89.9 90.4 87.2 87.0 86.5
Narrow net external debt/CAR (35.2) (55.6) (64.4) 1.7 (37.6) (44.1) (46.7) (50.7) (54.6)
GG balance/GDP (0.5) (8.5) (4.0) (4.1) (1.2) (1.3) (0.4) (0.1) (0.1)
GG net debt/GDP (24.2) (38.6) (25.7) (3.4) (16.6) (16.4) (17.1) (18.8) (19.3)
CPI inflation 6.7 6.6 14.6 7.4 6.0 5.7 5.5 5.3 5.1
Bank credit to resident private sector/GDP 37.2 42.9 37.1 29.0 26.3 25.2 23.9 22.7 21.5
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Kenya (B+/Stable/B)

  • Analyst: Ravi Bhatia, ravi.bhatia@spglobal.com
  • Latest publication: "Summary: Kenya", Sept. 20, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that Kenya's debt to GDP will start to decline in the next year as well as the risks stemming from increasing external debt.

We could raise the ratings if we were to see a significant and sustained improvement in Kenya's fiscal and external accounts.

We could lower the ratings if the country's external position weakens more than expected. This would occur, for example, due to higher current account deficits and a more rapid increase in external debt, or due to a significant decline in Kenya's external reserve buffers. We could also consider a downgrade if Kenya were to backtrack on its efforts to increase tax revenue from the current low levels, a move that would hamper fiscal consolidation and economic performance.

(Originally published on Sept. 20, 2019)

Table 28

Kenya
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 1.3 1.4 1.4 1.6 1.7 1.9 2.0 2.1 2.3
GDP growth 5.4 5.7 5.9 4.9 6.3 5.5 5.5 5.5 5.5
GDP per capita growth 2.6 3.0 3.2 2.3 3.6 2.8 2.8 2.8 2.8
Current account balance/GDP (10.4) (6.7) (4.9) (6.2) (5.0) (5.1) (5.1) (4.7) (4.6)
Gross external financing needs/CAR&FXR 128.7 122.8 121.6 128.9 130.8 133.6 131.0 131.1 133.8
Narrow net external debt/CAR 76.7 89.7 122.6 134.5 131.7 141.9 153.3 162.1 172.5
GG balance/GDP (5.5) (8.0) (7.4) (8.4) (6.7) (7.2) (6.0) (5.0) (5.0)
GG net debt/GDP 37.7 41.3 45.3 46.0 48.1 50.6 51.6 51.5 51.5
CPI inflation 6.9 6.6 6.3 8.0 4.7 5.5 6.0 6.0 6.0
Bank credit to resident private sector/GDP 36.8 37.1 35.2 31.3 29.6 27.8 26.3 25.0 23.7
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Kuwait (AA/Stable/A-1+)

  • Analyst: Maxim Rybnikov, maxim.rybnikov@spglobal.com
  • Latest publication: "Summary: Kuwait", July 19, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 3
  • External assessment: 1
  • Fiscal assessment, flexibility and performance: 1
  • Fiscal assessment, debt burden:1
  • Monetary assessment: 3
Outlook: Stable

The stable outlook reflects our expectation that Kuwait's public and external balance sheets will remain strong over the next two years, primarily underpinned by sizable foreign assets accumulated in the country's sovereign wealth fund. This should partially offset risks related to Kuwait's undiversified oil-dependent economy.

We could raise the ratings if wide-ranging political and economic reforms enhanced institutional effectiveness and improved long-term economic diversification, although we think such a scenario is unlikely over the forecast horizon to 2022.

We could lower the ratings on Kuwait if we observed a sustained decline in economic wealth, for example due to a fall in oil prices beyond our current expectations or materially weaker rates of economic growth. We could also lower the ratings if Kuwait's domestic political stability deteriorated, or if regional geopolitical risks were to significantly escalate.

(Originally published on July 19, 2019)

Table 29

Kuwait
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 39.7 27.0 24.8 26.8 30.3 29.4 28.7 28.0 28.6
GDP growth 0.5 0.6 2.9 (4.7) 1.2 0.5 0.5 2.5 2.5
GDP per capita growth (2.6) (2.9) (1.1) (6.6) (1.4) (1.5) (1.5) 0.5 0.5
Current account balance/GDP 33.4 3.5 (4.6) 8.0 18.3 17.5 4.8 (0.8) (1.1)
Gross external financing needs/CAR&FXR 67.2 124.6 143.2 118.6 105.6 108.1 132.8 147.7 153.4
Narrow net external debt/CAR (413.8) (633.3) (682.1) (599.0) (477.0) (487.2) (570.7) (627.2) (633.2)
GG balance/GDP 21.6 8.7 7.7 10.3 16.6 11.0 7.8 7.0 8.9
GG net debt/GDP (364.9) (479.0) (489.8) (448.5) (408.2) (420.1) (432.2) (440.8) (432.6)
CPI inflation 3.1 3.7 3.5 1.5 0.6 1.0 1.5 2.2 2.2
Bank credit to resident private sector/GDP 73.7 106.3 113.9 105.2 93.5 99.2 103.8 107.8 107.2
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Lebanon (CCC/Negative/C)

  • Analyst: Zahabia Gupta, zahabia.gupta@spglobal.com
  • Latest publication: "Lebanon 'CCC/C' Ratings Affirmed Despite Selective Default Of Commercial Banks; Outlook Remains Negative", Dec. 20, 2019
Rating assessment snapshot
  • Institutional assessment: 6
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 6
Outlook: Negative

The negative outlook reflects the risk to Lebanon's creditworthiness from heightened financial and monetary pressures tied to widespread protests and the government's resignation. The outlook also indicates that we could lower the ratings over the next six to 12 months following our review of the government's policy response to acute financial, economic, and social pressures, and how effectively the authorities will be able to restore depositor confidence.

We could affirm or raise the ratings following the timely formation of a new government that is able to advance immediate reforms to stem deposit withdrawals and diffuse social tensions. Sizable external donor support that could help ease fiscal pressure and improve confidence in the currency peg could also contribute to a positive rating action.

We could lower the ratings if the confidence in and stability of the currency peg weaken further, further pressuring the government's ability to service its upcoming debt maturities amid large external financing needs. We could also lower the ratings if the government signaled its intention to restructure its existing debt, implying that investors will receive less value than the promise of the original securities.

(Originally published on Dec. 20, 2019)

Table 30

Lebanon
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 8.6 8.5 8.5 8.8 9.2 9.1 9.0 9.2 9.4
GDP growth 1.9 0.4 1.6 0.6 0.3 (1.2) (2.0) 1.0 1.0
GDP per capita growth (4.1) (3.8) (1.0) (0.7) (0.9) (2.4) (3.2) (0.3) (0.3)
Current account balance/GDP (26.1) (17.1) (20.4) (22.7) (22.1) (19.5) (7.3) (11.3) (14.0)
Gross external financing needs/CAR&FXR 129.5 122.8 134.7 134.5 138.0 157.5 149.5 153.9 165.2
Narrow net external debt/CAR (71.0) (59.3) (65.9) (61.1) (36.6) (14.7) (9.7) 6.1 24.3
GG balance/GDP (6.4) (7.9) (9.6) (7.0) (11.1) (10.5) (9.5) (10.0) (10.5)
GG net debt/GDP 108.1 112.0 116.4 118.7 122.7 132.3 141.8 147.4 153.3
CPI inflation 0.8 (3.7) (0.8) 4.4 6.1 3.0 6.0 3.0 3.0
Bank credit to resident private sector/GDP 93.9 96.1 99.6 100.1 91.8 86.6 84.9 85.5 86.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Montenegro (B+/Stable/B)

  • Analyst: Maxim Rybnikov, maxim.rybnikov@spglobal.com
  • Latest publication: "Summary: Montenegro", Sept. 13, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden:5
  • Monetary assessment: 6
Outlook: Stable

The stable outlook balances the implementation risks of Montenegro's fiscal adjustment program over the next 12 months against the potential for economic growth to be stronger than our base case.

We could lower the ratings if Montenegro's fiscal performance were materially weaker than we currently forecast. This could be the case, for example, if revenue measures adopted under the 2017-2020 fiscal strategy fell short of target or if the government found it difficult to control spending ahead of the 2020 general election. It could also be the case if the government decided to implement new debt-financed infrastructure projects, leading net general government debt to continuously increase as a percentage of GDP in contrast to our current projection of net leverage declining after 2020. Additionally, ratings pressure could emerge if the flow of inbound FDI dried up or Montenegro faced unforeseen pressure from the gradual tightening of global monetary policy.

We could raise the ratings on Montenegro if multiple ongoing projects in infrastructure, energy, and tourism yielded better-than-expected results, improving the country's economic growth outlook and reducing balance-of-payments risks.

(Originally published on Sept. 13, 2019)

Table 31

Montenegro
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 7.4 6.5 7.0 7.8 8.8 8.7 9.1 9.7 10.5
GDP growth 1.8 3.4 3.0 4.7 4.9 3.0 2.8 2.7 2.6
GDP per capita growth 1.7 3.4 2.9 4.7 4.9 3.0 2.8 2.7 2.6
Current account balance/GDP (12.4) (11.0) (16.2) (16.1) (17.2) (17.3) (15.9) (12.3) (11.3)
Gross external financing needs/CAR&FXR 139.9 131.9 137.5 129.9 129.7 125.3 126.1 122.9 121.9
Narrow net external debt/CAR 152.9 157.0 154.3 165.2 153.3 161.5 167.1 163.1 159.9
GG balance/GDP (2.9) (8.3) (3.6) (5.3) (3.8) (3.0) (2.5) (2.0) (1.0)
GG net debt/GDP 56.9 62.7 61.1 60.1 61.6 63.1 63.2 62.8 61.5
CPI inflation (0.7) 1.5 (0.3) 2.4 2.6 0.3 1.5 2.0 2.0
Bank credit to resident private sector/GDP 52.7 51.3 50.1 49.9 50.5 51.9 52.4 52.6 52.7
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Morocco (BBB-/Stable/A-3)

  • Analyst: Marko Mrsnik, marko.mrsnik@spglobal.com
  • Latest publication: "Morocco Outlook Revised To Stable From Negative On Budgetary Consolidation Efforts; 'BBB-/A-3' Ratings Affirmed", Oct. 4, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 3
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden:3
  • Monetary assessment: 3
Outlook: Stable

The outlook is stable, balancing our expectation of further fiscal consolidation and gradual improvement in the current account position over the next two years against risks to economic growth from domestic structural shortcomings or external shocks, for example, due to a slowdown in world trade.

We could raise the rating if budgetary consolidation prospects materially improve or the ongoing transition toward a more flexible exchange rate that targets inflation significantly bolsters Morocco's external competitiveness and ability to withstand macroeconomic external shocks. We could also raise the ratings if Morocco's ongoing economic diversification strategy results in less volatile and higher rates of economic growth.

Conversely, we could lower the rating if the government deviates from its fiscal consolidation plan, resulting in substantially higher government debt compared with our forecast; real GDP growth rates significantly undershoot our expectations; or external imbalances widen, resulting in a significant increase in the economy's gross financing needs.

(Originally published on Oct. 4, 2019)

Table 32

Morocco
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 3.2 2.9 2.9 3.1 3.3 3.3 3.5 3.7 3.9
GDP growth 2.7 4.5 1.1 4.1 3.0 2.8 3.7 4.0 4.2
GDP per capita growth 1.2 3.1 (0.2) 2.8 1.7 1.6 2.5 2.8 3.0
Current account balance/GDP (6.0) (2.1) (4.2) (3.7) (5.5) (4.9) (3.8) (3.3) (2.7)
Gross external financing needs/CAR&FXR 99.1 93.7 92.7 93.1 94.9 96.2 91.3 90.7 89.4
Narrow net external debt/CAR 37.3 32.7 34.3 31.4 30.7 26.0 23.5 20.2 16.5
GG balance/GDP (4.9) (4.2) (4.1) (3.5) (3.7) (3.7) (3.4) (3.2) (3.0)
GG net debt/GDP 45.8 47.0 48.9 48.2 49.5 50.5 50.9 50.9 50.8
CPI inflation 0.4 1.6 1.6 0.8 1.9 0.4 1.1 1.5 1.7
Bank credit to resident private sector/GDP 78.7 77.9 78.9 76.8 75.4 75.1 74.4 72.9 71.3
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Mozambique (CCC+/Stable/C)

  • Analyst: Gardner Rusike, gardner.rusike@spglobal.com
  • Latest publication: "Mozambique Foreign Currency Rating Raised To 'CCC+' From 'SD' On Completed Debt Exchange; Outlook Stable", Nov. 22, 2019
Rating assessment snapshot
  • Institutional assessment: 6
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 5
Outlook: Stable

The stable outlook balances the risks associated with large twin deficits against the improving economic growth prospects over the next 12 months, supported by large investments in extractive sectors.

We could consider raising the ratings if we observe significant improvements in fiscal and external positions against our base-case assumptions.

We could lower the ratings if we believe that another distressed exchange or difficulties in Mozambique's external financing requirements by public and private sectors have become more likely.

(Originally published on Nov. 22, 2019)

Table 33

Mozambique
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 0.7 0.6 0.4 0.4 0.5 0.5 0.5 0.5 0.5
GDP growth 7.4 6.7 3.8 3.7 3.4 2.5 5.0 5.5 5.5
GDP per capita growth 4.3 3.7 0.9 0.8 0.5 (0.4) 2.0 2.5 2.5
Current account balance/GDP (34.2) (40.3) (35.3) (20.4) (30.0) (28.9) (28.0) (27.4) (25.8)
Gross external financing needs/CAR&FXR 156.5 170.2 173.1 151.3 159.0 173.1 161.0 157.7 155.2
Narrow net external debt/CAR 199.1 290.8 357.2 263.8 293.9 278.3 279.4 280.6 280.7
GG balance/GDP (1.7) (4.1) (8.0) (6.5) (9.2) (6.5) (5.0) (5.0) (5.0)
GG net debt/GDP 53.6 76.9 96.6 96.3 100.7 103.2 101.8 100.0 97.5
CPI inflation 2.6 3.6 19.9 15.1 3.9 3.0 5.0 5.0 6.0
Bank credit to resident private sector/GDP 34.7 36.0 34.6 26.9 24.8 24.6 23.7 22.8 21.7
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Nigeria (B/Stable/B)

  • Analyst: Gardner Rusike, gardner.rusike@spglobal.com
  • Latest publication: "Nigeria 'B/B' And 'ngA/ngA-1' Ratings Affirmed; Outlook Stable", Sept. 13, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 5
  • Fiscal assessment, debt burden:4
  • Monetary assessment: 4
Outlook: Stable

The stable outlook over the next six to 12 months reflects the balance of the risks of still-weak economic performance against the moderate external debt and external buffers.

We may lower the ratings if Nigeria's international reserves were to decline markedly while external debt rose significantly faster than our current assumptions.

We could raise our ratings if Nigeria's economic performance were to strengthen significantly, with positive GDP per capita growth in real terms, or if fiscal deficits were to reduce faster than we project.

(Originally published on Sept. 13, 2019)

Table 34

Nigeria
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 3.1 2.6 2.1 1.8 1.8 1.9 2.0 2.1 2.2
GDP growth 6.3 2.7 (1.6) 0.8 1.9 2.0 2.2 2.2 2.2
GDP per capita growth 3.5 (0.0) (4.2) (1.8) (0.8) (0.7) (0.5) (0.5) (0.5)
Current account balance/GDP 0.2 (3.2) 0.7 3.0 1.5 1.3 1.0 0.6 0.3
Gross external financing needs/CAR&FXR 86.0 108.3 101.3 91.3 92.5 98.8 97.1 98.7 99.9
Narrow net external debt/CAR 2.6 28.4 36.9 40.2 48.8 49.1 52.2 54.8 56.5
GG balance/GDP (1.8) (3.5) (4.0) (5.4) (4.5) (3.7) (3.0) (3.0) (3.0)
GG net debt/GDP 10.4 10.3 12.6 14.2 13.7 16.3 18.1 19.8 21.3
CPI inflation 8.1 9.0 15.7 16.5 12.1 11.0 9.0 9.0 9.0
Bank credit to resident private sector/GDP 14.8 14.3 16.1 14.3 11.6 11.2 10.9 10.6 10.3
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

North Macedonia (BB-/Stable/B)

  • Analyst: Maxim Rybnikov, maxim.rybnikov@spglobal.com
  • Latest publication: "Summary: North Macedonia", Sept. 6, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 4
  • External assessment: 3
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden:3
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects the balance between the risks from North Macedonia's rising public debt and still comparatively modest income levels, and its favorable economic prospects alongside the potential for institutional settings to strengthen over time.

We could raise our ratings on North Macedonia if timely reform implementation, for instance as part of EU accession negotiations, strengthened North Macedonia's institutional arrangements and improved its economic prospects. We could also consider an upgrade if North Macedonia displayed a stronger fiscal performance that placed net general government debt firmly on a downward path.

We could lower the ratings if major political tensions returned or reform momentum waned, impairing growth and foreign direct investment (FDI) and undermining the country's longer-term growth prospects. We could also lower the ratings if large fiscal slippages or off-budget activities were to call into question the sustainability of North Macedonia's public debt, raise the sovereign's borrowing costs, and substantially increase its external obligations, given the constraints of the exchange-rate regime.

(Originally published on Sept. 6, 2019)

Table 35

Macedonia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 5.5 4.9 5.2 5.5 6.1 6.1 6.4 6.9 7.6
GDP growth 3.6 3.9 2.9 0.2 2.7 3.0 3.0 3.2 3.2
GDP per capita growth 3.5 3.7 2.7 0.1 2.6 2.9 2.9 3.1 3.1
Current account balance/GDP (0.6) (1.9) (2.9) (0.8) (0.4) (2.3) (2.2) (1.6) (1.5)
Gross external financing needs/CAR&FXR 108.6 108.3 109.9 106.4 109.7 110.8 110.3 108.3 108.1
Narrow net external debt/CAR 25.1 26.9 28.3 32.6 24.4 26.8 25.0 23.3 21.6
GG balance/GDP (4.2) (3.4) (2.7) (2.8) (1.1) (2.3) (2.5) (2.5) (2.5)
GG net debt/GDP 33.2 36.4 38.6 40.4 39.5 40.8 42.2 43.4 44.2
CPI inflation (0.3) (0.3) (0.2) 1.4 1.5 0.8 1.2 2.0 2.5
Bank credit to resident private sector/GDP 49.4 51.1 48.1 48.8 49.2 48.8 49.1 49.2 49.4
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Oman (BB/Negative/B)

  • Analyst: Zahabia Gupta, zahabia.gupta@spglobal.com
  • Latest publication: "Oman Ratings Affirmed At 'BB/B'; Outlook Negative", Oct. 18, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:2
  • Monetary assessment: 4
Outlook: Negative

The negative outlook reflects the risk that in the absence of substantial fiscal measures to curtail the government deficit, or a more favorable external environment, fiscal, and external buffers will continue to erode.

We could lower our ratings on Oman over the next six-12 months if we view the government as unable to contain external debt accumulation related to still-sizable fiscal deficits, which we expect will continue to increase through 2022.

We could also consider a downgrade if the government's funding costs increase beyond our expectations, or if funding pressures rise, with sizable external debt maturities currently scheduled for 2021 and 2022.

We could revise the outlook to stable if Oman is able to demonstrate a sustainable reduction in its accumulation of external debt, for example through fiscal adjustment measures or via privatization of significant state-owned enterprises (SOEs) and assets. We could also revise the outlook to stable if economic growth prospects are significantly stronger than we currently anticipate.

(Originally published on Oct. 18, 2019)

Table 36

Oman
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 20.2 16.6 14.8 15.5 17.2 16.9 17.1 17.4 17.6
GDP growth 1.5 4.6 5.1 0.4 1.8 0.5 3.0 2.2 2.0
GDP per capita growth (2.1) 0.5 (1.0) (2.9) 0.8 (0.5) 1.8 1.0 0.5
Current account balance/GDP 5.2 (15.9) (19.2) (15.6) (5.5) (7.1) (7.5) (8.9) (9.0)
Gross external financing needs/CAR&FXR 94.7 128.1 168.9 149.8 130.1 130.7 130.8 132.2 136.8
Narrow net external debt/CAR (80.9) (78.2) (17.0) 22.6 19.9 26.8 32.4 43.8 54.6
GG balance/GDP (0.9) (17.5) (21.1) (13.9) (8.7) (8.4) (8.1) (8.3) (7.9)
GG net debt/GDP (68.6) (60.4) (29.6) (10.3) (4.9) 0.4 6.9 14.1 20.6
CPI inflation 1.0 0.1 1.1 1.6 0.9 0.5 0.9 2.2 1.1
Bank credit to resident private sector/GDP 57.1 75.0 86.4 85.6 81.0 86.7 89.5 92.6 95.2
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Poland (A-/Stable/A-2 )

  • Analyst: Karen Vartapetov, karen.vartapetov@spglobal.com
  • Latest publication: "Summary: Poland", Oct. 11, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden:2
  • Monetary assessment: 2
Outlook: Stable

The stable outlook reflects Poland's balancing risks coming from uncertain external environment and post-election fiscal pressures against prospects for continued income convergence with the rest of the EU.

We could raise the ratings if real income growth in Poland continued to outpace that of key trading partners without creating external imbalances; or if the government posted budgetary surpluses, leading to a reduction in outstanding public debt in absolute terms. We could also consider an upgrade if the new auto-enrolment pension plan, once implemented, boosted private savings, reducing the government's contingent liability related to the aging and declining working-age population.

The ratings could come under pressure if Poland's fiscal performance deteriorated significantly, or rapid wage growth led to a faster-than-expected increase in net external borrowing, a potential sign of eroding competitiveness.

(Originally published on Oct. 11, 2019)

Table 37

Poland
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 14.3 12.6 12.4 13.9 15.4 15.4 15.8 16.2 16.6
GDP growth 3.3 3.8 3.1 4.9 5.2 4.3 3.2 3.0 2.8
GDP per capita growth 3.4 3.9 3.2 4.9 5.1 4.3 3.2 3.0 2.8
Current account balance/GDP (2.1) (0.6) (0.5) 0.0 (1.0) (0.9) (1.4) (1.7) (2.0)
Gross external financing needs/CAR&FXR 90.4 86.6 86.8 86.7 88.9 87.4 88.4 89.2 90.2
Narrow net external debt/CAR 55.0 56.2 48.5 50.0 36.6 36.3 36.0 36.3 36.9
GG balance/GDP (3.7) (2.6) (2.4) (1.5) (0.2) (1.5) (2.5) (2.5) (2.4)
GG net debt/GDP 46.8 48.8 50.7 47.7 45.3 44.2 44.4 44.7 44.9
CPI inflation 0.1 (0.7) (0.2) 1.6 1.2 2.1 2.5 2.5 2.5
Bank credit to resident private sector/GDP 58.2 59.0 59.3 57.4 57.8 58.2 59.0 60.0 61.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Qatar (AA-/Stable/A-1+)

  • Analyst: Shokhrukh Temurov, shokhrukh.temurov@spglobal.com
  • Latest publication: "Summary: Qatar", Nov. 8, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 1
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 1
  • Fiscal assessment, debt burden:1
  • Monetary assessment: 4
Outlook: Stable

The stable outlook primarily reflects our view that Qatar's economy will remain resilient, supported by high wealth levels and a strong net asset position. However, we anticipate continued institutional weakness and softened economic growth over the forecast horizon.

A negative rating action could follow if increased geopolitical tensions in the region have a more severe effect on Qatar than we currently anticipate, leading, for example, to significant capital outflows or an unexpected deterioration in fiscal and external performance, which might reduce Qatar's fiscal cushion to absorb additional shocks.

We could consider raising the ratings if Qatar's political institutions were to develop in line with those of its nonregional peers, and we observed a marked increase in transparency, including greater clarity on the Qatari government's external assets.

(Originally published on Nov. 8, 2019)

Table 38

Qatar
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 92.3 66.7 58.4 63.2 71.6 72.3 72.5 72.6 75.9
GDP growth 4.0 3.7 2.1 1.6 1.5 1.7 1.2 1.3 2.0
GDP per capita growth (4.9) (4.4) (4.7) (0.1) 0.3 (0.3) (0.8) (0.7) (0.0)
Current account balance/GDP 24.0 8.5 (5.5) 3.9 8.7 6.8 5.0 3.9 4.4
Gross external financing needs/CAR&FXR 82.7 106.0 144.5 156.7 168.6 172.1 174.8 183.1 185.8
Narrow net external debt/CAR (125.6) (153.9) (151.6) (102.3) (89.4) (110.3) (114.1) (125.9) (129.7)
GG balance/GDP 16.2 (5.5) (2.9) (1.5) 7.6 4.2 4.7 4.1 4.6
GG net debt/GDP (96.1) (113.0) (120.5) (93.1) (84.6) (97.0) (99.9) (102.0) (100.3)
CPI inflation 3.4 1.8 2.9 0.2 0.2 0.4 0.8 1.0 1.2
Bank credit to resident private sector/GDP 69.5 99.2 109.6 106.2 101.6 105.5 109.4 112.5 110.8
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Ras Al Khaimah (A/Stable/A-1)

  • Analyst: Max McGraw, maximillian.mcgraw@spglobal.com
  • Latest publication: "Summary: Ras Al Khaimah (Emirate of)" Oct. 25, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 3
  • External assessment: 2
  • Fiscal assessment, flexibility and performance: 1
  • Fiscal assessment, debt burden: 1
  • Monetary assessment: 5
Outlook: Stable

The stable outlook on RAK reflects our expectation that the government's fiscal position will remain strong, and that growth in the emirate will average about 2.6% over the next two years.

We could raise the ratings if trend growth strengthens.

We could lower the ratings if slower economic growth resulted in RAK's GDP per capita falling below our current expectations, weakening the emirate's wealth levels. We could also lower the ratings if debt-service costs increase.

(Originally published on Oct. 25, 2019)

Table 39

Ras Al Khaimah
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 26.5 27.5 27.8 27.9 28.3 28.5 29.0 29.3 29.6
GDP growth 3.3 1.3 4.6 1.5 2.8 2.5 3.0 2.5 2.5
GDP per capita growth 0.2 (1.7) 1.7 (1.4) 0.2 (0.5) 0.0 (0.5) (0.5)
Current account balance/GDP N.A N.A N.A N.A N.A N.A N.A N.A N.A
Gross external financing needs/CAR&FXR N.A N.A N.A N.A N.A N.A N.A N.A N.A
Narrow net external debt/CAR N.A N.A N.A N.A N.A N.A N.A N.A N.A
GG balance/GDP 0.2 1.4 1.7 0.9 1.8 1.3 1.2 1.1 1.1
GG net debt/GDP (10.9) (6.9) (3.3) (3.3) (4.4) (5.9) (6.8) (7.6) (8.4)
CPI inflation 1.5 3.0 (0.4) 2.4 4.2 2.5 2.0 2.0 2.0
Bank credit to resident private sector/GDP N.A N.A N.A N.A N.A N.A N.A N.A N.A
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Romania (BBB-/Negative/A-3)

  • Analyst: Gabriel Forss, gabriel.forss@spglobal.com
  • Latest publication: "Outlook On Romania Revised To Negative On Rising Fiscal And External Deficits; 'BBB-/A-3' Ratings Affirmed", Dec. 10, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 3
  • Fiscal assessment, flexibility and performance: 4
  • Fiscal assessment, debt burden: 3
  • Monetary assessment: 3
Outlook: Negative

The outlook revision reflects increasing risks to Romania's economic and fiscal stability should policymakers be unsuccessful stabilizing and consolidating Romania's budgetary stance, including from plans to implement further pension hikes from next year.

We could lower our ratings on Romania within the next 24 months if:

  • Fiscal and external imbalances continue to deteriorate and persist for longer than we currently anticipate, with the absence of fiscal consolidation resulting in higher public and external debt than we currently forecast.
  • A lack of economic policy synchronization leads to an overextension of real wages and increased exchange rate volatility, with potential negative repercussions on public- and private-sector balance sheets.

We could revise the outlook to stable if we observed that the government has made headway in anchoring fiscal consolidation, leading to a stabilization of Romania's public finances and external position.

(Originally published on Dec. 10, 2019)

Table 40

Romania
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 10.0 9.0 9.5 10.8 12.3 12.5 13.0 13.8 14.9
GDP growth 3.4 3.9 4.8 7.1 4.0 3.9 3.5 2.9 2.8
GDP per capita growth 3.8 4.3 5.4 7.8 4.6 4.2 3.8 3.2 3.1
Current account balance/GDP (0.7) (1.2) (2.1) (3.2) (4.5) (5.1) (5.4) (4.8) (4.5)
Gross external financing needs/CAR&FXR 99.7 95.6 97.8 96.4 98.3 100.4 102.1 103.9 105.0
Narrow net external debt/CAR 48.5 40.1 29.0 30.9 32.1 36.5 40.8 43.3 44.5
GG balance/GDP (1.2) (0.6) (2.6) (2.6) (3.0) (4.3) (4.0) (3.2) (3.0)
GG net debt/GDP 32.3 31.7 29.9 29.1 29.8 31.8 33.6 34.7 35.7
CPI inflation 1.4 (0.4) (1.1) 1.1 4.1 4.0 3.5 3.2 3.2
Bank credit to resident private sector/GDP 32.0 31.0 29.2 27.5 26.9 26.1 25.4 24.9 24.4
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Russia (BBB-/Stable/A-3)

  • Analyst: Karen Vartapetov, karen.vartapetov@spglobal.com
  • Latest publication: "Summary: Russia", July 19, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 1
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 1
  • Monetary assessment: 3
Outlook: Stable

Our outlook is stable because, in our view, prospects for strengthening of Russia's already solid public and external balance sheets balance risks from the potential escalation of geopolitical tensions and new international sanctions. Moreover, we assume an adequate government policy response to additional sanctions. In the event of fresh sanctions, we think the Russian authorities would focus on containing macroeconomic risks and limit retaliatory action.

We could take a negative rating action in the next 24 months if geopolitical events result in foreign governments introducing materially tighter sanctions on Russia. These could, for example, target large state-owned energy companies, systemically important banks, or the secondary market for Russian sovereign debt. We could also take a negative action if we saw a risk of a material deterioration of Russia's budgetary performance, either due to a looser fiscal framework or contingent liabilities in the banking sector or state-owned enterprises (SOEs).

Absent an increase in sanctions, we could take a positive rating action if Russia's GDP per capita increases at rates comparable with that in countries with similar income levels. The faster-than-expected accumulation of fiscal buffers, mitigating commodity-related revenue volatility, and effective measures to address long-term fiscal pressures from an aging population, could also lead us to take a positive rating action.

(Originally published on July 19, 2019)

Table 41

Russia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 14.2 9.4 8.7 10.7 11.4 11.5 12.0 12.0 12.1
GDP growth 0.7 (2.0) 0.3 1.8 2.5 1.3 1.8 1.8 1.8
GDP per capita growth (1.1) (2.2) 0.1 1.7 2.5 1.4 1.9 1.9 1.9
Current account balance/GDP 2.8 4.9 1.9 2.1 6.8 4.7 4.3 3.0 2.1
Gross external financing needs/CAR&FXR 73.1 70.2 72.1 69.9 56.5 57.4 58.9 60.8 62.5
Narrow net external debt/CAR (26.4) (48.3) (52.9) (52.1) (57.7) (72.8) (76.5) (83.7) (83.9)
GG balance/GDP (2.3) (3.4) (4.5) (1.5) 2.9 1.4 0.5 0.1 0.1
GG net debt/GDP (0.1) 4.2 8.5 9.7 5.3 3.3 2.6 2.4 2.2
CPI inflation 7.8 15.5 7.0 3.7 2.9 4.5 3.6 4.0 4.0
Bank credit to resident private sector/GDP 60.4 62.3 59.5 59.7 59.0 62.5 65.4 68.8 71.7
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Rwanda (B+/Stable/B)

  • Analyst: Zahabia Gupta, zahabia.gupta@spglobal.com
  • Latest publication: "Rwanda Upgraded To 'B+' On Strong Economic Prospects; Outlook Stable", Aug. 9, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden: 3
  • Monetary assessment: 4
Outlook: Stable

The outlook is stable because we expect Rwanda will continue to achieve above-average real GDP growth over the medium term, balanced against risks of fiscal slippages and rising government debt.

We may lower the rating over the next year if the government's investment program significantly increases external financing requirements and external debt above our current projections. We could also see downward pressure on the rating if higher fiscal deficits lead us to reassess Rwanda's management and sustainability of public finances. An additional downward trigger could be if the Ebola crisis currently in the Democratic Republic of Congo (DRC) significantly impacts Rwanda's economy and exports.

Although we do not see further ratings upside in the near term, we may raise the rating in the medium term if the external outlook improves substantially, possibly as a result of government policies to diversify exports. We could also raise the rating if income levels rise more rapidly than our current projections.

(Originally published on Aug. 9, 2019)

Table 42

Rwanda
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.9 0.9
GDP growth 6.2 8.9 6.0 6.2 8.6 7.5 7.7 7.5 7.0
GDP per capita growth 3.3 6.0 4.1 3.5 5.9 4.8 5.0 4.8 4.4
Current account balance/GDP (11.8) (15.3) (16.0) (7.8) (7.9) (9.9) (10.2) (9.4) (8.6)
Gross external financing needs/CAR&FXR 104.2 119.2 124.6 104.8 105.1 107.7 109.4 109.6 109.0
Narrow net external debt/CAR 46.6 66.9 94.0 103.0 108.9 123.7 136.8 145.6 151.0
GG balance/GDP (4.0) (5.0) (3.4) (4.6) (4.8) (5.5) (6.0) (5.5) (5.5)
GG net debt/GDP 24.9 29.9 34.6 39.5 41.5 44.7 47.4 48.8 50.0
CPI inflation 1.8 2.5 5.7 4.9 1.4 3.0 5.0 5.0 5.0
Bank credit to resident private sector/GDP 16.8 20.0 20.0 19.9 20.7 21.2 21.4 21.4 21.6
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Saudi Arabia (A-/Stable/A-2)

  • Analyst: Ravi Bhatia, ravi.bhatia@spglobal.com
  • Latest publication: "Saudi Arabia 'A-/A-2' Ratings Affirmed; Outlook Stable", Sept. 27, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 1
  • Fiscal assessment, flexibility and performance: 4
  • Fiscal assessment, debt burden:1
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that Saudi Arabian oil production facilities that were hit in the Sept. 14 attacks will be swiftly repaired. The stable outlook also reflects our view that Saudi Arabia will maintain a pace of moderate economic growth and retain strong government and external balance sheets (net asset-stock positions) over the next two years, despite sizable fiscal deficits and heightened regional tensions.

We could raise the ratings if Saudi Arabia's economic growth prospects improve beyond our current expectations, for example, as a result of a sustained and significant pick-up in oil prices and volume demand, possibly tied to the end of U.S.-China trade tensions and a rebound of the global economy. We could also raise the rating should authorities improve the transparency of accounting for general government assets.

We could lower our ratings if we observed a sustained rise in geopolitical or domestic political instability that posed a significant and continued threat to the oil sector, or if we observed fiscal weakening beyond our expectations, or a sharp deterioration in the sovereign's external position. An unexpected materialization of contingent liabilities could also place additional pressure on the ratings.

(Originally published on Sept. 27, 2019)

Table 43

Saudi Arabia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 24.6 20.8 20.3 21.5 24.3 23.1 23.2 23.0 23.3
GDP growth 3.7 4.1 1.7 (0.7) 2.4 (0.4) 3.1 2.0 1.8
GDP per capita growth 1.0 1.6 1.0 (1.8) 1.4 (1.4) 2.1 1.0 0.8
Current account balance/GDP 9.8 (8.7) (3.7) 1.5 9.0 5.5 4.7 3.1 3.7
Gross external financing needs/CAR&FXR 30.6 34.6 34.3 37.4 38.3 41.2 41.8 42.4 42.6
Narrow net external debt/CAR (225.3) (309.5) (268.0) (204.0) (140.8) (148.9) (151.1) (151.4) (146.8)
GG balance/GDP 2.1 (7.6) (15.9) (6.6) (2.3) (4.8) (3.9) (4.4) (3.5)
GG net debt/GDP (120.6) (121.8) (105.9) (92.2) (74.8) (72.8) (67.2) (62.1) (56.7)
CPI inflation 2.2 1.3 2.0 (0.9) 2.5 (0.9) 1.9 2.0 2.1
Bank credit to resident private sector/GDP 46.4 58.0 60.9 56.5 50.8 54.9 57.0 59.5 61.0
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Senegal (B+/Stable/B)

  • Analyst: Remy Carasse, remy.carasse@spglobal.com
  • Latest publication: "Senegal Outlook Revised To Stable On Rapid Increase In Government Debt; Ratings Affirmed At 'B+/B'", Dec. 6, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 5
  • Fiscal assessment, debt burden:5
  • Monetary assessment: 5
Outlook: Stable

The outlook is stable because we expect that, despite strong economic growth and some fiscal consolidation, general government debt will continue to rise as a percentage of GDP beyond our previous expectations. In our view, this renders Senegal's economy vulnerable to potential future funding shocks whether via rising interest rates, or reduced access to external financing, or via an unexpected curb on economic growth.

We could raise the ratings on Senegal if:

  • Net government borrowing (including borrowing to pay down arrears or support state enterprises) declines significantly, toward 3% of GDP; and
  • Economic growth reflects a higher component of private sector investment and activity.

Conversely, if the government fails to carry through growth-enhancing measures--allocating resources more efficiently and improving investment conditions for the private sector in particular--the rating could come under strain. Senegal's creditworthiness could also deteriorate if economic imbalances increase or if pressures on the West African CFA franc (XOF)-to-euro exchange rate appear. A devaluation--which we do not expect--would immediately increase government debt to GDP, weighing considerably on Senegal's fiscal performance.

(Originally published on Dec. 6, 2019)

Table 44

Senegal
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 1.4 1.2 1.3 1.4 1.5 1.5 1.5 1.6 1.8
GDP growth 4.1 6.4 6.4 7.1 6.8 6.1 6.4 6.7 7.5
GDP per capita growth 1.2 3.4 3.4 4.2 3.9 3.2 3.5 3.8 4.6
Current account balance/GDP (6.8) (5.3) (4.2) (7.3) (7.4) (7.5) (8.5) (9.3) (6.3)
Gross external financing needs/CAR&FXR 126.2 122.4 120.3 133.7 133.5 126.8 130.7 134.7 129.5
Narrow net external debt/CAR 112.7 113.4 106.7 123.7 120.4 127.4 127.9 127.4 118.8
GG balance/GDP (4.0) (3.7) (3.3) (3.0) (3.7) (3.0) (3.0) (3.0) (3.0)
GG net debt/GDP 36.7 38.9 43.0 44.1 50.8 52.2 53.0 53.3 52.4
CPI inflation (1.1) 0.1 0.8 1.3 0.5 1.0 1.0 1.5 1.5
Bank credit to resident private sector/GDP 31.5 31.7 32.5 34.6 32.7 32.0 31.3 30.3 29.2
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Serbia (BB+/Positive/B)

  • Analyst: Karen Vartapetov, karen.vartapetov@spglobal.com
  • Latest publication: "Serbia Upgraded To 'BB+' On Resilient Macroeconomic Fundamentals; Outlook Positive", Dec. 13, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 2
  • Fiscal assessment, debt burden:2
  • Monetary assessment: 4
Outlook: Positive

The positive outlook reflects strong prospects for continued inflows of productive foreign direct investments (FDI), which could further widen and diversify Serbia's export base, strengthening its balance of payments' resilience to external shocks.

We could raise our rating on Serbia in the next 12 months if FDI continues supporting exports and GDP growth, also boosting its foreign exchange reserves, despite the muted growth outlook for the country's key trading partners. This scenario would be further supported by compliance with the IMF program reform targets, including those related to the introduction of the more binding fiscal rules.

Conversely, we could revise the outlook to stable if a protracted slowdown in the eurozone markedly weakened Serbia's growth momentum or caused external imbalances to recur. An outlook revision to stable could also arise if fiscal performance deteriorated, putting Serbia's public debt on an upward path.

(Originally published on Dec. 13, 2019)

Table 45

Serbia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 6.6 5.6 5.8 6.3 7.2 7.4 7.6 7.7 7.8
GDP growth (1.6) 1.8 3.3 2.0 4.4 3.6 3.9 2.9 2.8
GDP per capita growth (1.1) 2.3 3.9 2.6 5.0 4.1 4.4 3.4 3.3
Current account balance/GDP (5.6) (3.5) (2.9) (5.3) (5.2) (5.9) (5.7) (5.2) (4.6)
Gross external financing needs/CAR&FXR 101.4 100.6 98.0 103.5 104.6 107.6 103.4 103.7 103.6
Narrow net external debt/CAR 71.1 70.6 63.4 60.9 49.1 42.9 42.1 42.0 41.2
GG balance/GDP (6.2) (3.5) (1.2) 1.1 0.6 (0.5) (0.5) (1.0) (1.0)
GG net debt/GDP 59.4 63.9 62.1 52.8 48.5 46.2 45.3 45.4 45.4
CPI inflation 2.1 1.4 1.1 3.1 2.0 2.0 2.0 2.7 3.0
Bank credit to resident private sector/GDP 45.3 45.1 44.1 42.9 44.1 45.4 45.7 45.7 45.6
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Sharjah (BBB+/Stable/A-2)

  • Analyst: Max McGraw, maximillian.mcgraw@spglobal.com
  • Latest publication: "Emirate of Sharjah 'BBB+/A-2' Ratings Affirmed; Outlook Stable", Oct. 25, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 3
  • External assessment: 2
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 2
  • Monetary assessment: 5
Outlook: Stable

Our outlook is stable because we expect that Sharjah's economy will expand steadily, by about 2% over 2019-2022, and that its debt and interest burdens will remain moderate.

We could raise our ratings if net general government debt or debt-service costs decreased materially; however, we view this as unlikely over the next two years.

We could lower our ratings in the next two years if wider budget deficits than anticipated accelerated the increase in the government's debt or interest costs. The ratings could also come under pressure if economic growth were significantly weaker than our base-case projections.

(Originally published on Oct. 25, 2019)

Table 46

Sharjah
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 16.1 16.5 17.1 17.5 18.3 18.9 19.5 20.0 20.6
GDP growth 2.9 0.1 3.0 2.0 0.7 2.3 2.5 1.8 1.8
GDP per capita growth 2.1 (0.9) 2.8 (0.0) (0.3) 1.3 1.5 0.8 0.8
Current account balance/GDP N.A N.A N.A N.A N.A N.A N.A N.A N.A
Gross external financing needs/CAR&FXR N.A N.A N.A N.A N.A N.A N.A N.A N.A
Narrow net external debt/CAR N.A N.A N.A N.A N.A N.A N.A N.A N.A
GG balance/GDP (2.7) (4.2) (3.2) (2.8) (4.0) (2.2) (2.9) (2.8) (2.8)
GG net debt/GDP 4.9 9.7 13.5 15.7 20.2 22.6 24.5 26.4 28.2
CPI inflation 1.6 3.4 0.8 2.7 4.5 2.0 2.0 1.8 1.8
Bank credit to resident private sector/GDP N.A N.A N.A N.A N.A N.A N.A N.A N.A
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

South Africa (BB/Negative/B)

  • Analyst: Ravi Bhatia, ravi.bhatia@spglobal.com
  • Latest publication: "South Africa Outlook Revised To Negative On Worsening Fiscal And Debt Trajectory; Ratings Affirmed", Nov. 22, 2019
Rating assessment snapshot
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 3
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 2
Outlook: Negative

The negative outlook indicates that South Africa's debt metrics are rapidly worsening as a result of the country's low GDP growth and high fiscal deficits.

We could lower the ratings if we were to observe continued fiscal deterioration, for example, due to higher pressure on spending, rising interest costs, or the crystallization of contingent liabilities related to state-owned enterprises (SOEs), especially Eskom. We could also lower the ratings if economic performance weakened further or if external funding pressures were to mount.

We could also consider lowering the ratings if the rule of law, property rights, or enforcement of contracts were to weaken significantly, undermining the investment and economic outlook. We currently view this as unlikely.

We could revise the outlook to stable if the government credibly arrested the rise in the net government debt-to-GDP ratio, controlled fiscal deficits, and improved SOEs. We could also revise the outlook if we saw a substantial improvement in the economic growth outlook.

(Originally published on Nov. 22, 2019)

Table 47

South Africa
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 6.5 5.8 5.3 6.2 6.4 6.0 6.1 6.3 6.6
GDP growth 1.9 1.2 0.4 1.4 0.8 0.6 1.6 1.9 1.9
GDP per capita growth 0.3 (0.4) (1.2) (0.2) (1.3) (1.0) 0.0 0.3 0.3
Current account balance/GDP (5.1) (4.6) (2.9) (2.5) (3.6) (4.1) (3.9) (3.7) (3.6)
Gross external financing needs/CAR&FXR 107.0 110.9 105.4 104.3 108.9 111.2 108.5 107.9 107.5
Narrow net external debt/CAR 17.9 8.4 29.6 45.6 40.6 49.0 52.4 54.8 56.0
GG balance/GDP (3.7) (3.7) (3.6) (4.0) (4.3) (6.0) (6.6) (6.3) (6.0)
GG net debt/GDP 43.4 46.5 47.6 49.4 53.1 57.8 61.6 64.9 67.7
CPI inflation 6.2 4.6 6.3 5.3 4.7 4.3 4.9 4.7 4.7
Bank credit to resident private sector/GDP 76.7 80.0 77.7 77.1 78.3 78.4 77.2 76.0 74.8
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

St. Helena (BBB-/Stable/A-3)

  • Analyst: Gardner Rusike, gardner.rusike@spglobal.com
  • Latest publication: "St. Helena Assigned 'BBB-/A-3' Ratings; Outlook Stable", Dec. 4, 2019
Rating assessment snapshot
  • Institutional assessment: 3
  • Economic assessment: 5
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 1
  • Monetary assessment: 5
Outlook: Stable

The stable outlook balances our expectation of strong and ongoing support from the U.K. government and gradual economic reforms that could broaden economic sectors over the next two years.

We could raise the ratings if the pace of St. Helena's economic growth is materially stronger than we currently forecast. Under this scenario, private sector growth will support St. Helena's revenue through tax collection and potentially limit its external financing needs.

We would lower the ratings if the U.K. financial support diminishes and St. Helena's taxation policies are unable to compensate for that revenue. We could also lower the ratings if a severe natural disaster were to affect St. Helena's economy.

(Originally published on Dec. 4, 2019)

Table 48

St. Helena
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 14.5 14.1 12.4 11.9 12.5 12.5 13.3 14.2 15.5
GDP growth 5.1 5.1 (7.1) (1.7) (1.0) 1.0 1.0 2.5 3.0
GDP per capita growth 1.1 3.7 (4.8) (3.3) (1.9) 0.0 0.0 1.5 2.0
Current account balance/GDP N.A N.A N.A N.A N.A N.A N.A N.A N.A
Gross external financing needs/CAR&FXR N.A N.A N.A N.A N.A N.A N.A N.A N.A
Narrow net external debt/CAR N.A N.A N.A N.A N.A N.A N.A N.A N.A
GG balance/GDP 2.7 1.8 (0.5) (0.6) 14.4 2.0 2.0 2.0 2.0
GG net debt/GDP (9.3) (7.8) (7.0) (13.0) (11.2) (10.7) (10.2) (9.6) (9.0)
CPI inflation 2.1 1.9 2.6 5.1 3.8 4.0 4.0 4.5 5.0
Bank credit to resident private sector/GDP 33.7 28.6 32.7 39.1 41.1 41.0 41.0 42.0 42.5
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Tajikistan (B-/Stable/B)

  • Analyst: Shokhrukh Temurov, shokhrukh.temurov@spglobal.com
  • Latest publication: "Tajikistan 'B-/B' Ratings Affirmed; Outlook Remains Stable", Aug. 23, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden: 4
  • Monetary assessment: 6
Outlook: Stable

The outlook is stable because we expect that Tajikistan will maintain strong economic growth and low government debt-service costs over the next 12 months, owing to the still-high component of concessional borrowing in the government's debt stock, which helps offset risks from weak fiscal, external, and monetary performance.

We could take a negative rating action if strain on Tajikistan's government debt-servicing capacity were materially to increase, for example as a result of widening fiscal deficits, or the government taking on substantial amounts of commercial debt to fund infrastructure projects. Downward pressure on the rating may also build if current account imbalances widened significantly and the net external debt position deteriorated sharply, given the low level of foreign exchange reserves, excluding monetary-gold.

Conversely, we could consider an upgrade if strong economic growth resulted in materially higher GDP per capita than we currently anticipate. Narrower fiscal imbalances and improved effectiveness of monetary policy, for example, due to a significant reduction of financial dollarization and a material strengthening of the banking system, could also lead us to take a positive rating action.

(Originally published on Aug. 23, 2019)

Table 49

Tajikistan
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 1.1 0.9 0.8 0.8 0.8 0.9 0.9 0.9 0.9
GDP growth 6.7 6.0 6.9 7.1 7.3 6.5 6.1 6.0 6.0
GDP per capita growth 4.3 3.7 4.6 4.9 5.0 4.2 3.8 3.7 3.7
Current account balance/GDP (3.4) (6.1) (4.2) 2.2 (5.0) (3.7) (2.8) (2.7) (2.8)
Gross external financing needs/CAR&FXR 116.1 132.8 127.5 102.6 103.5 105.0 104.5 104.2 104.4
Narrow net external debt/CAR 70.1 88.8 91.4 76.3 85.6 87.9 90.1 91.7 93.8
GG balance/GDP 2.5 (1.9) (8.4) (5.1) (3.3) (3.1) (2.2) (2.1) (2.1)
GG net debt/GDP 19.8 25.4 35.0 39.5 40.8 41.3 41.5 41.7 41.7
CPI inflation 7.4 5.1 6.1 6.7 5.4 7.0 6.9 6.7 6.5
Bank credit to resident private sector/GDP 21.5 23.6 18.4 14.2 12.8 12.1 11.6 11.2 11.0
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Togo (B/Stable/B)

  • Analyst: Remy Carasse, remy.carasse@spglobal.com
  • Latest publication: "Summary: Togo", Oct. 25, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 3
  • Monetary assessment: 5
Outlook: Stable

The stable outlook on Togo balances our expectation of robust economic growth and fiscal consolidation over the next 12 months against risks of weaker-than-expected economic and budgetary performance.

We could raise the ratings if Togo's economic growth is markedly stronger than we forecast, and if external and fiscal deficits and net government debt as a share of GDP decrease substantially.

We could lower the ratings on Togo if economic and fiscal reforms slacken, leading for example to slow real GDP growth, a slippage in fiscal performance, or an increased government debt burden. We could also lower our ratings if we saw pronounced pressure on the WAEMU international reserves or on the West African CFA franc (XOF) to euro exchange rate.

(Originally published on Oct. 25, 2019)

Table 50

Togo
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.8
GDP growth 5.9 5.7 5.1 4.4 4.9 5.1 5.1 5.2 5.2
GDP per capita growth 3.2 3.1 2.5 1.8 2.4 2.5 2.5 2.6 2.6
Current account balance/GDP (10.0) (11.0) (9.8) (2.0) (4.7) (4.7) (4.6) (4.5) (4.3)
Gross external financing needs/CAR&FXR 120.1 125.6 135.0 189.9 144.6 144.5 142.7 140.1 137.6
Narrow net external debt/CAR 62.7 84.8 129.6 114.2 115.0 118.5 118.8 115.2 110.8
GG balance/GDP (6.9) (8.8) (9.6) (0.3) (0.8) (2.5) (2.5) (2.3) (2.3)
GG net debt/GDP 51.4 61.0 66.6 61.4 61.2 60.0 58.9 57.5 56.1
CPI inflation 0.2 2.6 1.3 (1.0) 0.9 1.0 1.3 1.5 1.5
Bank credit to resident private sector/GDP 38.0 42.7 43.5 42.4 41.2 40.7 40.1 39.5 38.8
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Turkey (B+/Stable/B)

  • Analyst: Maxim Rybnikov, maxim.rybnikov@spglobal.com
  • Latest publication: "Turkey Foreign And Local Currency Ratings Affirmed; Outlook Stable", Aug. 2, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 4
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 4
  • Fiscal assessment, debt burden:3
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our baseline forecast that, despite the absence of a coordinated and proactive policy response, the Turkish economy and banking system will navigate existing challenges over the next year, helped by the U.S. Federal Reserve's looser monetary policy. We forecast that growth will moderately recuperate and current account deficits will remain contained over the medium term.

We could lower our ratings on Turkey if we saw an increasing likelihood of systemic banking distress with the potential to undermine Turkey's fiscal position. Key indicators of this could include a rise in corporate loan book default rates in excess of our current forecast, difficulties rolling over banks' foreign funding, or waning confidence in the lira and banking system by Turkey's domestic residents resulting in deposit withdrawals or their sustained further dollarization. We could also lower the ratings if Turkey's economic growth weakened materially beyond our projections, which could likewise weigh on the government's fiscal performance.

We could consider an upgrade if the government successfully devised and implemented a credible and transparent economic adjustment program that bolsters confidence in Turkey's banks and economy, while reducing balance-of-payments risks and bringing a sustained decline in inflation.

(Originally published on Aug. 2, 2019)

Table 51

Turkey
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 12.0 10.9 10.8 10.6 9.4 9.1 9.6 10.0 10.6
GDP growth 5.2 6.1 3.2 7.5 2.8 (0.1) 3.1 3.3 3.3
GDP per capita growth 3.8 4.7 1.8 6.2 1.3 (1.4) 1.8 2.0 1.9
Current account balance/GDP (4.7) (3.7) (3.8) (5.6) (3.5) (0.1) (0.8) (1.4) (1.9)
Gross external financing needs/CAR&FXR 163.1 169.5 170.9 161.3 164.6 151.9 150.6 148.4 147.7
Narrow net external debt/CAR 121.0 125.5 131.7 135.7 120.3 113.5 106.8 105.1 103.3
GG balance/GDP (0.8) (1.0) (1.7) (2.0) (2.8) (3.2) (3.0) (2.5) (2.0)
GG net debt/GDP 25.2 23.6 24.6 24.0 27.0 28.5 28.7 28.8 28.2
CPI inflation 8.9 7.7 7.8 11.1 16.3 15.3 11.3 9.0 9.0
Bank credit to resident private sector/GDP 57.4 59.7 62.4 63.4 59.4 55.9 52.5 51.3 50.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Uganda (B/Stable/B)

  • Analyst: Gardner Rusike, gardner.rusike@spglobal.com
  • Latest publication: "Uganda Ratings Affirmed At 'B/B'; Outlook Stable", Dec. 13, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 4
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden:6
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that, despite their initial impact on Uganda's fiscal and external balances, infrastructure investments will ultimately support development and fuel economic growth. We expect the government to maintain its relations with official creditors who provide external concessional funding despite the absence of a policy coordination program.

We could lower our ratings on Uganda if investment projects fail to provide anticipated benefits in moderating deficits. A downgrade could also stem from Uganda's fiscal or external debt metrics deteriorating significantly from our base-case projections, for instance because of increased spending ahead of elections or revenue shortfalls not met with similar expenditure reduction. We could also lower the rating if access to concessional debt became less forthcoming.

Although unlikely in the near to medium term, we could raise the ratings if growth, fiscal, and external metrics markedly exceeded our expectations.

(Originally published on Dec. 13, 2019)

Table 52

Uganda
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 0.7 0.6 0.6 0.6 0.7 0.7 0.8 0.8 0.8
GDP growth 4.5 5.7 2.6 4.5 7.7 5.6 6.0 6.0 6.0
GDP per capita growth 1.1 2.2 (0.7) 1.2 4.2 2.2 2.6 2.6 2.6
Current account balance/GDP (7.8) (6.7) (3.3) (5.5) (8.7) (9.6) (9.4) (9.0) (8.6)
Gross external financing needs/CAR&FXR 106.4 102.0 97.9 101.9 106.7 115.2 119.1 120.0 120.6
Narrow net external debt/CAR 48.4 61.7 65.6 72.6 81.1 89.7 96.0 102.2 105.4
GG balance/GDP (3.9) (4.4) (4.9) (3.8) (4.5) (5.6) (6.0) (5.5) (5.0)
GG net debt/GDP 20.3 24.4 29.5 30.3 33.2 35.7 38.1 39.7 40.7
CPI inflation 3.1 5.6 5.7 5.2 2.6 2.8 3.5 4.0 4.0
Bank credit to resident private sector/GDP 14.2 14.5 14.5 13.7 13.6 13.5 13.4 13.2 13.1
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Ukraine (B/Stable/B)

  • Analyst: Aarti Sakhuja, aarti.sakhuja@spglobal.com
  • Latest publication: "Ukraine Ratings Raised To 'B' On Improved Macroeconomic Management; Outlook Stable", Sept. 27, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment, flexibility and performance: 3
  • Fiscal assessment, debt burden: 4
  • Monetary assessment: 6
Outlook: Stable

The stable outlook reflects our expectation that Ukraine's new government will preserve the macroeconomic reforms of recent years while the economy recovers and general government debt relative to GDP declines. As a result, Ukraine should retain access to domestic and international capital markets, allowing it to meet commercial debt repayments through 2020.

We could consider a positive rating action if we see improvements in growth, fiscal, and external metrics beyond our expectations. We could also consider raising the ratings if inflation converges toward the NBU's target, or if credit growth in real terms picks up and capital controls are lifted.

Downward ratings pressure could build if disruptions to funding from concessional programs or capital market access over the next year call into question Ukraine's ability to meet large external repayments. This in turn could happen if the government were to backtrack on key reforms.

(Originally published on Sept. 27, 2019)

Table 53

Ukraine
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 2.9 2.1 2.2 2.6 3.1 3.5 4.1 4.5 4.8
GDP growth (6.6) (9.8) 2.4 2.5 3.3 3.6 3.0 3.0 3.0
GDP per capita growth (6.3) (4.5) 2.9 2.9 3.8 4.2 3.5 3.5 3.5
Current account balance/GDP (3.5) 1.8 (1.4) (2.2) (3.3) (2.8) (3.2) (3.2) (3.5)
Gross external financing needs/CAR&FXR 154.6 166.5 146.1 135.8 130.7 122.8 121.8 121.8 121.6
Narrow net external debt/CAR 135.7 152.3 143.1 119.3 103.6 90.7 85.8 83.8 83.1
GG balance/GDP (10.3) (3.2) (2.2) (1.4) (2.1) (2.3) (2.1) (2.0) (2.0)
GG net debt/GDP 68.1 76.1 78.7 69.0 58.9 51.9 49.5 47.1 45.3
CPI inflation 12.1 48.7 13.9 14.4 11.0 8.8 7.0 6.5 5.5
Bank credit to resident private sector/GDP 66.9 52.1 42.8 34.6 30.6 28.7 27.5 26.6 25.8
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Uzbekistan (BB-/Stable/B)

  • Analyst: Max McGraw, maximillian.mcgraw@spglobal.com
  • Latest publication: "Uzbekistan 'BB-/B' Ratings Affirmed; Outlook Stable", Dec. 13, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 3
  • Fiscal assessment, flexibility and performance: 5
  • Fiscal assessment, debt burden:1
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that, over the next year, Uzbekistan's fiscal and external positions will remain strong but decline slightly, because of current account deficits and government borrowing.

Although unlikely over the next year, we could raise the ratings if Uzbekistan's increased integration with the global economy and government reforms of state-owned enterprises (SOEs) result in increased growth potential and resiliency for the economy. Further diversification of the government's revenue base or the composition of exports would also be supportive of the ratings.

We could lower the ratings over the next year if Uzbekistan's integration with the global economy were to result in a significant deterioration in the fiscal and external balance sheets. This could happen if imports remain elevated and current account deficits continue to be funded by debt-creating flows and asset drawdowns. We could also lower the ratings if we observed increasing weakness in key SOEs, leading to growing contingent liabilities for the government.

(Originally published on Dec. 13, 2019)

Table 54

Uzbekistan
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 2.5 2.6 2.5 1.8 1.5 1.7 1.8 2.1 2.3
GDP growth 7.2 7.4 6.1 4.5 5.1 5.5 5.5 5.5 5.5
GDP per capita growth 5.3 5.6 4.3 2.7 3.2 3.6 3.6 3.6 3.6
Current account balance/GDP 1.4 0.6 0.4 2.5 (7.1) (6.3) (6.1) (5.3) (4.7)
Gross external financing needs/CAR&FXR 84.7 78.1 79.3 75.1 87.0 84.4 86.9 87.3 88.7
Narrow net external debt/CAR (68.0) (84.5) (92.2) (78.4) (51.5) (37.6) (33.9) (25.7) (16.6)
GG balance/GDP 1.6 0.3 (0.5) (3.3) (2.1) (2.0) (1.8) (1.7) (1.5)
GG net debt/GDP (13.4) (11.2) (12.2) (18.2) (5.4) 0.2 3.9 6.6 8.9
CPI inflation 6.2 5.5 5.5 13.8 17.5 15.0 13.0 12.0 12.0
Bank credit to resident private sector/GDP 18.2 18.9 21.7 36.5 41.1 41.2 42.3 42.6 43.3
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

Zambia (CCC+/Stable/C)

  • Analyst: Gardner Rusike, gardner.rusike@spglobal.com
  • Latest publication: "Zambia Ratings Lowered To 'CCC+/C' On Low Foreign Reserves And High Debt Service Obligations; Outlook Stable", Aug. 23, 2019
Rating assessment snapshot
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment, flexibility and performance: 6
  • Fiscal assessment, debt burden: 6
  • Monetary assessment: 4
Outlook: Stable

The outlook is stable because we expect the government to meet its commercial debt obligations over the next 12 months.

We could lower the ratings on Zambia over that period, if, for example, central bank reserves reduced or the country's external debt increased beyond our expectations, possibly due to a further sharp depreciation of the kwacha.

We could consider raising our ratings if Zambia's fiscal and external imbalances improved. This could be demonstrated, for example, by materially stronger fiscal consolidation than we expect or easing of the government's foreign currency debt burden.

(Originally published on Aug. 23, 2019)

Table 55

Zambia
2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
GDP per capita (in ‘000) 1.7 1.3 1.3 1.5 1.5 1.4 1.4 1.4 1.5
GDP growth 4.7 2.9 3.8 3.4 3.8 2.5 3.0 3.5 3.5
GDP per capita growth 1.6 (0.2) 0.7 0.4 0.8 (0.5) 0.0 0.5 0.5
Current account balance/GDP 2.1 (2.7) (3.3) (1.7) (1.3) (2.3) (2.2) (2.1) (2.0)
Gross external financing needs/CAR&FXR 93.3 103.4 120.3 117.0 116.4 127.1 132.0 133.5 134.4
Narrow net external debt/CAR 43.0 90.7 110.5 112.0 106.2 131.2 140.9 143.9 147.2
GG balance/GDP (4.8) (9.4) (5.8) (7.6) (7.2) (7.0) (6.0) (5.5) (5.5)
GG net debt/GDP 28.1 51.9 54.7 57.9 67.9 72.9 74.2 75.1 76.0
CPI inflation 7.8 10.1 17.9 6.6 7.5 10.0 9.5 8.0 8.0
Bank credit to resident private sector/GDP 13.6 16.0 12.3 11.4 11.8 11.6 11.4 11.2 11.0
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

This report does not constitute a rating action.

Primary Credit Analyst:Frank Gill, Madrid (34) 91-788-7213;
frank.gill@spglobal.com
Secondary Contact:Maxim Rybnikov, London (44) 20-7176 7125;
maxim.rybnikov@spglobal.com
Additional Contact:EMEA Sovereign and IPF;
SovereignIPF@spglobal.com

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