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EMEA Emerging Markets Sovereign Rating Trends Midyear 2021

This report does not constitute a rating action.

There is still a mixed outlook for the 53 emerging sovereigns we rate across the Commonwealth of Independent States and Central and Eastern Europe (CIS+CEE); the Middle East and North Africa (MENA); and sub-Saharan Africa (SSA). While we are projecting global growth of 5.6% this year (6.4% in emerging markets ex China), low vaccination rates in Africa, much of MENA, and even in middle income EMEA sovereigns such as Russia make these economies potentially more vulnerable to variants of the virus, and at risk of underperforming. At the same time, the strong recovery in commodity prices, including oil, will help to reinflate commodity producers' economies--25 out of the 53 EM sovereigns. The second-round effects of this on fiscal prospects (as well as exchange rates) in Angola, the GCC, Russia, and Zambia are already observable. Longer term economic prospects are less clear. In Africa, the macroeconomic performance of the biggest oil producers, Angola and Nigeria, as measured by Okun's Economic Discomfort Index ([EDI] see chart 1; EDI is the sum of unemployment and inflation), has been far weaker than those African sovereigns with larger domestic economies and more diversified export baskets; indeed, despite their considerable fiscal challenges, on the EDI, Ghana, Ukraine, and particularly Egypt appear to have resisted the worst of the pandemic fallout.

Chart 1

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So has EM EMEA finally turned the corner?

While two sovereigns formerly on negative outlooks--Romania (BBB-/Stable) and Uzbekistan (BB-/Stable)--have returned to stable without a rating change, over the last six months we have lowered our ratings on Cape Verde (B-/Stable), Kenya (B/Stable), Montenegro (B/Stable), and Morocco (BB+/Stable). What they have in common both pre-dates the global pandemic (rising public debt) but has also heightened their vulnerability to the pandemic (major tourism sectors in all four). In the case of Cape Verde, the current account deficit shifted from close to balance in 2019 to a deficit of 16% of GDP last year, while the economy contracted by 14.9%, pushing net general government debt (already high in 2019) to 126% of GDP at the end of last year (though nearly all Cape Verde's sovereign debt is concessional, and hence very low cost).

Looking at the seven sovereigns currently on a negative outlook, it is apparent that the pandemic has taken a greater toll on sovereigns with limited monetary flexibility and therefore lower capacity to monetize the initial cost of the virus to households and firms. This has divided emerging from developed sovereigns since the virus was first detected in late 2019. The ability to operate a contra-cyclical fiscal policy response has hinged on the monetary credibility of central banks. Where this is extensive, particularly in reserve-issuing sovereigns such as the U.S., and in Europe, and Japan, the temporary fiscal support has been profuse.

On the other hand, many EM EMEA sovereigns rely on foreign currency borrowing and/or nonresident capital inflows into local debt markets to finance the gap between tax collection (typically low in the 'B' category) and expenditure. The mean monetary flexibility score (on a scale of 1 to 6) for the 53 sovereigns in this report is 4.4. Only in three cases (Israel, Poland, and South Africa) is monetary flexibility considered a strength. This reflects these three sovereigns' deep local currency capital markets, track records of low inflation, and the independence of their monetary authorities. In 25 of the 53 sovereigns, monetary flexibility is classified as a weakness due to lower central bank independence, fixed or managed exchange rates, and less-developed local capital markets. This leads broadly to considerably higher foreign currency debt levels, creating vulnerabilities to balance sheet shocks, especially for commodity producers. Angola experienced this in 2016 (when government debt doubled as a percentage of GDP) and again in 2018. These balance sheet effects can and do move in the opposite (i.e. positive) direction. As the kwanza appreciates amid the recovery in oil prices, and Angola's budgetary deficit narrows, we project that its debt to GDP will trend down this year, albeit from very elevated levels.

Of the 53 sovereigns, 29 are rated 'B+' or lower, and where we have the majority of our negative outlooks. One consequence of the pandemic for lower rated sovereigns has been a decline in reserve adequacy, whether measured as imports or short-term debt coverage. This partly explains our negative outlooks or CreditWatch placements on Belarus (B/Negative), Ethiopia (B-/Watch Neg), and Bahrain (B+/Negative). The welcome news is that the International Monetary Fund (IMF) is planning a $650 billion increase in Special Drawing Rights (SDR) this year to boost the reserve adequacy of struggling EM economies. The IMF is predominantly focused on improving external buffers--and indirectly the fiscal capacity, and growth prospects--of low-income countries (LICs). But there is also the possibility that high-income IMF member states could redirect a portion of their share of the $650 billion SDR allocation to lower income economies such as Togo and Zambia, significantly benefiting their external liquidity positions (see "An SDR Is Born: The IMF Creates A Reserve Asset For Low-Income Countries," published June 22, 2021).

Two sovereigns, Lebanon and Zambia, are currently rated Selective Default ('SD'). What lies ahead for them?

With copper prices currently up nearly 70% year-on-year, and Zambia's reserve levels set to double as a consequence of the SDR allocation, the country's reserve adequacy and broader external metrics are set to improve over the next 12 months. However, Zambia's ability to emerge from default depends primarily on ongoing negotiations with the IMF for a new extended credit facility, a prerequisite for Zambia to advance in its talks with its official and commercial creditors. We expect that progress on this front is likely to be delayed until after this August's general election. Indeed, the recent improvement in Zambia's key export prices may encourage its creditors to play for time. Overall, without greater visibility on the direction of future policy, upward rating pressure appears limited despite a considerable improvement in external dynamics, including those afforded by the SDR allocation. Since early June, there has been a rapid increase--from low levels--in COVID-19 infection rates in Zambia. Only about 0.4% of the population has been vaccinated.

More than a year after the Lebanese government defaulted on its foreign currency obligations, pressure on the banking system is still mounting. This is not least because of the pandemic's economic impact, the Beirut port blast last August, Lebanon's ongoing political deadlock, and a run on deposits that's only been partly slowed by Lebanon's ad hoc capital restrictions. S&P Global Ratings believes the true extent of Lebanese banks' losses will materialize only once government debt restructuring takes place. There is also significant discord among key political institutions about the cause and scope of the country's debt distress and the path to restructuring, including the treatment of depositors (see "Calculating The Cost Of Lebanon's Bank-Sovereign Doom Loop," published May 24, 2021).

Chart 2

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Chart 3

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Chart 4

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The Risks Ahead

We have seven negative outlooks in EM EMEA, but this means the vast majority of ratings are on stable outlook. Most emerging sovereigns in EMEA are benefiting from buoyant capital inflows/benign financing conditions and an accelerating global economic recovery, particularly via the run-up in commodity prices, although supportive market conditions remain contingent on messaging coming out of the FED. The worry in the market is the changeability of the U.S. central bank's diagnosis of a rapidly reinflating U.S. economy.

We see seven key risks for the sovereign asset class in EMEA during the remainder of 2021.

FED messaging.  This risks feeding further dollar appreciation and rate uncertainty, leading to a reversal of capital inflows into emerging markets.

Epidemiology.  The combination of low vaccination rates and limited access to vaccines, alongside the rise of the Delta variant, has pushed up infection rates in around 40% of our 53 rated emerging sovereigns. The data on infections for the first half of June is trending higher for Bahrain, Saudi Arabia, Russia (despite its production of an effective vaccine), South Africa, and Zambia among others. With vaccination rates averaging 11% in middle income EM sovereigns and less than 2% in SSA, the epidemiological situation is clearly still the biggest macro risk out there for EMs. This has raised some concerns that an early 2021 recovery could be interrupted by mid-summer. While most of the talk about permanent economic scarring in advanced economies has been replaced by optimism about a positive productivity shock from digitalization/automation, in EMs there are still considerable fears that the economic fallout from the pandemic will linger, not least in tourism-focused economies.

Fiscal.  The fiscal trajectories of emerging market sovereigns continue to be a major concern. Between 2019 and end-2021, we forecast that government debt will increase by more than 20 percentage points of GDP in Iraq, Zambia, Georgia, Cape Verde, Congo, and Bahrain. The capacity to service that debt is questionable in those emerging sovereigns that borrow extensively in foreign currency or otherwise lack the monetary policy instruments and domestic savings to manage the cost of the pandemic. Government debt is more than 6x revenues in Nigeria and Zambia, and over 5x in Bahrain, Cape Verde, and Angola. While Egypt has made strenuous efforts to continue to operate a primary surplus over the last fiscal year, it still faces a level of interest expenditure that absorbs over 50% of tax receipts (though we expect this proportion to gradually decline over the next several years, except in the case of persistent pressures on the exchange rate). Ghana is projected to divert 56% of the tax it collects this year to debt servicing. In many cases structural fiscal weakness pre-dates the pandemic. Bahrain, Oman, Iraq, Sharjah, Romania, Rwanda, Uganda, Uzbekistan, Botswana, Nigeria, and Kenya were all running budgetary deficits before interest of over 3% of GDP in 2019.

External.  External vulnerabilities are the exception rather than the rule for the majority of the 53 emerging markets that we rate in EMEA. Of the larger EMEA credits, only a handful--Romania, Serbia, Kenya, Oman, Ethiopia, and Uzbekistan--are operating current account deficits in excess of 4% of GDP (though external deficits for major tourism exporters including Montenegro and Cape Verde are over three times that). Improving terms of trade will benefit the 28 of the 53 sovereigns that are commodity exporters (15 of these primarily exporters of hydrocarbons). Nevertheless, the pandemic has drained reserves, particularly for the 30 EM EMEA sovereigns we rate 'B+' or lower. According to S&P Global research, even after a planned allocation of $650 billion in additional SDRs by the IMF, Bahrain, Turkey, Nigeria, Belarus, Ethiopia, Congo Kinshasa, Congo Brazzaville, Burkina Faso, Mozambique, and Kenya will still fall short of meeting both import coverage and short-term external debt coverage thresholds for reserve adequacy as recommended by the IMF.

Political fallout from COVID-19.  Low vaccination rates and rising infections associated with the Delta variant could prove challenging in countries where the authorities are reluctant to reimpose restrictions on mobility given busy electoral calendars. Zambia holds parliamentary and presidential elections this August. Parliamentary elections are also scheduled to take place in Russia this September; in October, South Africa will hold local elections, while campaigning is already underway in Kenya and Hungary ahead of their general elections next year. Many of the contributing factors to ongoing nationwide protests in Colombia are identifiable in EMEA. Should the epidemiological situation deteriorate further, popular frustration could limit governments' fiscal and economic options.

Underinvestment and growth.  Budget spending across EMEA is heavily weighted toward public sector wage bills and interest servicing, particularly in those frontier markets that investors are increasingly focused on in the search for yield. One other trend to watch is low capital investment into hydrocarbon/commodity sectors across Africa, where the average cost of oil production per barrel is more than twice that in Saudi Arabia. To the extent that the industrialized world shifts away from fossil fuels, higher cost producers--particularly in Africa--are less competitive compared to low cost producers in the Gulf. In South Africa, the wage bill has also crowded out a more energetic step up in investment including into public education, one way of pushing high structural unemployment lower. On the other hand, we view growth prospects in Ethiopia, Ghana, Kenya, and Senegal more positively.

DSSI.  The advertised risk that DSSI and the Common Framework would lead to private sector bail ins has so far failed to materialize. The restructuring of China's lending portfolio to Angola has freed up resources for commercial debt servicing, as, of course, has the strong rally in oil prices, and Angola's recent pattern of running primary budgetary surpluses. Also benefiting its balance sheet is an appreciating kwanza. Should financing conditions worsen, or the third wave drag on lower rated sovereigns' fiscal capacities, debt restructuring will once again become a key market focus.

Table 1

Issuer 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

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

Azerbaijan

BB+/Stable/B 5 5 2 1 1 5

Bahrain

B+/Negative/B 5 4 4 6 6 4

Belarus

B/Negative/B 5 5 5 4 4 5

Benin

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

Bosnia and Herzegovina

B/Stable/B 5 5 4 3 2 6

Botswana

BBB+/Negative/A-2 3 5 2 3 1 4

Bulgaria

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

Burkina Faso

B/Stable/B 5 6 4 5 3 5

Cameroon

B-/Stable/B 6 5 5 4 3 5

Cape Verde

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

Congo

CCC+/Stable/C 6 6 6 4 6 5

Congo, D.R.

CCC+/Stable/C 6 6 6 4 2 6

Croatia

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

Egypt

B/Stable/B 5 5 6 6 6 4

Ethiopia

B-/Watch Neg/B 5 5 6 6 3 5

Georgia

BB/Negative/B 4 5 5 3 4* 4

Ghana

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

Hungary

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

Iraq

B-/Stable/B 6 6 6 6

Israel

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

Jordan

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

Kazakhstan

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

Kenya

B/Stable/B 4 5 6* 6 6 4

Kuwait

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

Lebanon

SD/NM/SD 6 6 6 6 6 6

Montenegro

B/Stable/B 4 4 6 4 6 6

Morocco

BB+/Stable/B 4 5 3 4* 4 3

Mozambique

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

Nigeria

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

North Macedonia

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

Oman

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

Poland

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

Qatar

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

Ras Al Khaimah

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

Romania

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

Russia

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

Rwanda

B+/Negative/B 4 5 5 6 4 4

Saudi Arabia

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

Senegal

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

Serbia

BB+/Stable/B 4 4 4 3* 2 4

Sharjah

BBB-/Stable/A-3 4 3 2 6* 5 5

St Helena

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

South Africa

BB-/Stable/B 4 5 3 6 6 2

Tajikistan

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

Togo

B/Stable/B 5 6 6 3 3 5

Turkey

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

Uganda

B/Stable/B 5 6 5 6 6 4

Ukraine

B/Stable/B 5 5 5 3 5 4

Uzbekistan

BB-/Stable/B 5 5 3 5 2 4

Zambia

SD/NM/SD 6 6 6 6 6 5
% of sovereigns with a score of 1 0 6 8 9 17 0
% of sovereigns with a score of 2 0 0 19 6 13 6
% of sovereigns with a score of 3 4 4 9 19 11 9
% of sovereigns with a score of 4 45 26 15 25 15 38
% of sovereigns with a score of 5 38 40 17 8 13 38
% of sovereigns with a score of 5 13 25 32 34 30 9
Median 5 5 4 4 4 4
Mean 4.6 4.7 4.1 4.2 3.8 4.4
Standard Deviation 0.8 1.2 1.7 1.6 1.9 1.0
*Deterioration since Dec. 2020. §Improvement since Dec. 2020

Table 2

EMEA EM Economic Outlook
Real GDP growth (%) GG balance / GDP (%) Net GG debt / GDP (%) Current account balance / GDP (%) Narrow net ext. debt / CAR (%)
2021 2022 2021 2022 2021 2022 2021 2022 2021 2022
Abu Dhabi 2.2 2.8 13.9 13.3 (230.8) (244.3) N/A N/A N/A N/A
Albania 4.5 4.0 (6.5) (3.5) 75.0 74.6 (8.5) (8.1) 8.1 11.2
Angola 0.3 2.0 1.0 0.5 100.4 94.8 4.4 3.0 164.4 168.3
Azerbaijan 2.4 5.7 0.3 1.7 (46.9) (46.0) 2.8 4.8 (95.8) (94.3)
Bahrain 2.7 2.3 (5.5) (4.8) 117.0 118.4 (4.4) (4.8) (35.4) (33.0)
Belarus 0.5 1.5 (3.8) (1.7) 36.5 38.9 (1.2) (2.1) 75.8 79.2
Benin 5.0 6.5 (4.5) (2.9) 39.1 39.1 (3.4) (3.5) 75.1 69.9
Bosnia and Herzegovina 2.5 2.5 (2.0) (0.5) 30.8 30.9 (2.6) (2.6) 11.2 10.5
Botswana 6.0 3.0 (5.0) (3.0) 15.4 17.6 (6.9) (6.7) (30.9) (20.2)
Bulgaria 2.9 4.3 (2.8) (1.9) 19.2 20.0 0.6 1.5 (40.4) (40.3)
Burkina Faso 6.0 5.5 (5.4) (4.3) 42.9 44.1 (1.9) (3.9) 47.6 55.0
Cameroon 3.2 3.5 (2.6) (2.3) 38.1 38.9 (3.8) (3.1) 112.7 103.2
Cape Verde 5.5 4.1 (8.5) (6.5) 127.3 126.6 (13.4) (10.3) 145.1 140.6
Congo (0.5) 3.0 (1.0) 1.0 112.7 104.3 (3.7) (2.6) 195.6 169.1
Congo, D.R. 4.5 4.5 (1.0) (0.5) 12.0 11.8 (2.5) (2.7) 25.3 22.4
Croatia 5.1 3.5 (2.9) (2.0) 74.3 72.8 (0.5) (0.4) 28.0 24.7
Egypt 2.5 4.8 (7.1) (6.3) 79.6 78.3 (3.6) (3.2) 120.0 116.2
Ethiopia 0.7 5.1 (3.4) (2.0) 31.1 30.9 (6.7) (5.7) 286.3 276.5
Georgia 4.0 4.2 (7.6) (4.5) 61.4 61.9 (12.5) (10.8) 137.6 136.3
Ghana 4.5 5.1 (8.3) (6.0) 70.7 69.8 (3.5) (3.2) 127.4 131.3
Hungary 4.3 4.9 (6.9) (5.5) 74.0 74.2 (0.2) (0.7) 21.4 18.2
Iraq 1.0 2.9 (8.0) (8.0) 70.1 74.2 5.8 5.9 (13.1) (17.6)
Israel 5.0 4.0 (8.5) (4.5) 75.3 75.9 3.3 3.3 (75.4) (74.7)
Jordan 2.0 2.0 (1.8) (1.0) 85.1 86.1 (6.3) (6.1) 70.7 76.5
Kazakhstan 3.2 3.6 (2.5) (0.5) (5.3) (5.6) (2.1) (2.2) (46.2) (46.7)
Kenya 4.4 5.4 (8.7) (7.7) 64.3 66.8 (5.1) (5.7) 219.1 233.1
Kuwait 0.0 7.0 3.9 7.4 (480.4) (456.4) 8.1 10.9 (678.6) (619.9)
Lebanon (10.0) 1.0 (5.0) (5.5) 112.0 108.2 (2.6) (3.0) 3.2 6.2
Montenegro 5.8 5.0 (7.0) (4.5) 82.3 80.6 (21.7) (17.6) 216.6 199.8
Morocco 5.0 3.9 (6.5) (5.7) 68.3 70.1 (3.4) (2.7) 29.9 29.1
Mozambique 2.5 5.0 (7.0) (6.0) 94.7 94.8 (27.7) (27.6) 446.3 425.1
Nigeria 1.9 2.2 (5.0) (4.5) 44.4 45.9 (1.2) (0.6) 60.3 66.0
North Macedonia 3.6 3.5 (4.9) (3.8) 53.6 55.6 (2.1) (1.6) 28.2 26.1
Oman 1.3 5.2 (4.5) (4.6) 16.8 22.0 (4.8) (5.5) 57.3 58.9
Poland 4.5 5.4 (5.5) (3.0) 56.4 56.6 0.7 (1.2) 20.1 18.1
Qatar 1.8 2.2 6.5 6.4 (121.1) (119.3) 1.6 2.4 (73.8) (70.9)
Ras Al Khaimah 3.0 2.3 0.8 0.9 (8.4) (9.0) N/A N/A N/A N/A
Romania 5.0 4.7 (7.0) (5.5) 48.0 50.3 (5.2) (5.2) 39.4 43.4
Russia 3.7 2.5 (1.1) 0.3 8.9 7.7 3.9 3.3 (83.7) (90.3)
Rwanda 4.4 6.5 (9.0) (7.6) 67.3 70.9 (11.9) (11.1) 165.2 178.3
Saudi Arabia 2.0 2.7 (2.0) (2.5) (59.2) (53.9) 4.8 5.1 (148.9) (143.5)
Senegal 4.0 6.5 (5.4) (3.5) 61.2 60.5 (9.3) (8.7) 126.7 120.7
Serbia 5.0 3.5 (6.9) (5.0) 52.6 55.1 (5.1) (5.4) 43.4 42.1
Sharjah 4.0 2.5 (10.2) (6.9) 40.9 46.6 N/A N/A N/A N/A
St Helena 0.5 2.0 0.5 0.0 (8.9) (8.4) N/A N/A N/A N/A
South Africa 4.2 2.6 (8.9) (7.2) 77.5 80.4 1.2 (1.1) 42.8 45.5
Tajikistan 5.0 5.1 (2.8) (2.8) 43.4 45.0 1.0 (0.4) 53.8 56.5
Togo 4.0 5.0 (3.5) (1.0) 43.7 41.8 (2.0) (1.7) 127.4 124.4
Turkey 6.1 3.3 (3.5) (3.5) 35.7 36.1 (3.7) (2.8) 113.5 111.2
Uganda 3.3 4.0 (10.0) (7.0) 45.0 49.2 (8.8) (8.8) 111.6 125.7
Ukraine 4.0 3.5 (5.3) (3.5) 59.3 58.5 (1.3) (1.9) 89.6 84.6
Uzbekistan 4.8 5.2 (5.8) (3.5) 14.4 17.6 (6.4) (5.9) 16.0 33.3
Zambia 1.4 3.0 (8.0) (6.0) 117.6 115.7 3.6 3.3 169.3 163.7
f--Forecast. GG--General government. CAR-- Current account receipts.

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

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 1
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 1
  • Fiscal assessment – Debt burden: 1
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that, despite oil price pressures, Abu Dhabi's fiscal position will remain strong over the next two years.

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

We could consider lowering the ratings if there were to be a material deterioration in Abu Dhabi's currently strong government balance sheet and net external asset position. If fiscal deficits or contingent liabilities caused liquid assets to drop below 100% of GDP, pressure on the ratings would develop. Downward pressure on the rating could also arise if domestic or regional events compromised political and economic stability in Abu Dhabi.

(research update last published March 27, 2020)

Table 3

Abu Dhabi
2015 2016 2017 2018 2019 2020e 2021f 2022f 2023f 2024f
GDP per capita (in ‘000) 76.1 71.2 76.6 91.0 97.1 90.7 101.1 99.0 96.6 96.5
GDP growth 4.9 2.6 (0.9) 1.3 1.5 (5.0) 2.2 2.8 1.9 1.9
GDP per capita growth 0.1 (1.8) (0.4) 4.9 10.4 (0.0) (0.3) 0.8 (0.3) (0.3)
Current account balance/GDP N/A 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 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 N/A
GG balance/GDP 6.2 (0.4) 4.5 9.7 10.6 8.5 13.9 13.3 11.4 11.5
GG net debt/GDP (228.6) (226.7) (216.4) (202.1) (216.2) (243.0) (230.8) (244.3) (254.4) (259.1)
CPI inflation 4.3 2.0 1.6 3.3 (0.8) (2.4) 2.0 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 N/A
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Albania (B+/Stable/B)

Rating score 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 expectation that:

  • Growth will rebound in 2021 and the economy will recover to 2019 levels by 2022, based on our assumption that effective vaccines will be distributed by the end of this year, benefiting tourism and remittance flows;
  • The fiscal deficit, which increased sharply in 2020, will narrow from 2021, helping the government debt to GDP to start declining again;
  • In the event of a protracted downturn, government borrowing from abroad will offset lost foreign exchange earnings and investment inflows and prevent foreign currency reserves from coming under pressure.

We could lower the ratings if, contrary to our expectations, the financing of Albania's external deficit becomes less secure, putting pressure on reserves. We could also lower the ratings if the government debt stock continues to rise, because of either higher fiscal deficits or the materialization of contingent liabilities from public-private partnerships (PPPs).

We could consider raising the ratings if the authorities implement reforms that significantly improve the business environment and management of fiscal risks, while foreign direct investment (FDI) inflows continue, and the informal economy shrinks.

(research update last published Aug. 1, 2020)

Table 4

Albania
2015 2016 2017 2018 2019 2020e 2021f 2022f 2023f 2024f
GDP per capita (in ‘000) 4.0 4.1 4.5 5.3 5.4 5.2 6.0 6.3 6.6 6.9
GDP growth 2.2 3.3 3.8 4.1 2.2 (5.0) 4.5 4.0 3.5 3.5
GDP per capita growth 2.6 3.3 4.0 4.4 2.8 (4.9) 4.6 4.1 3.6 3.6
Current account balance/GDP (8.6) (7.6) (7.5) (6.8) (8.0) (8.9) (8.5) (8.1) (7.3) (6.7)
Gross external financing needs/CAR&FXR 130.4 117.1 117.1 116.3 115.2 119.7 113.7 110.1 110.0 110.4
Narrow net external debt/CAR 19.7 11.8 12.2 7.3 3.4 3.6 8.1 11.2 14.5 15.9
GG balance/GDP (4.1) (1.8) (2.0) (1.6) (1.9) (6.8) (6.5) (3.5) (3.0) (2.0)
GG net debt/GDP 70.3 70.2 67.1 62.8 62.8 72.7 75.0 74.6 73.8 71.9
CPI inflation 1.9 1.2 2.1 2.0 1.4 1.6 2.0 2.4 2.5 2.6
Bank credit to resident private sector/GDP 38.1 37.1 35.4 32.5 33.9 37.7 36.5 35.5 35.2 34.9
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Angola (CCC+/Stable/C)

Rating score 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: Stable

The stable outlook balances the risks associated with the large external funding needs against reduced near-term debt-servicing requirements following restructuring agreements with bilateral lenders.

We could lower the rating if the government's access to external funds were to weaken, which could limit its ability to service external commercial debt, or if further deterioration in the external environment, such as lower oil prices, were to heighten external and fiscal pressures. We could also lower the rating if the government signaled its intention to restructure its commercial debt on top of its bilateral restructuring arrangements.

We could raise the rating if economic and fiscal reforms, supported by an improving external environment, were to reduce the debt-servicing burden, stabilize the exchange rate, and increase foreign exchange reserves beyond our current projections.

Table 5

Angola
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 4.2 3.5 4.1 3.3 2.8 1.9 2.0 2.0 2.1 2.1
GDP growth 0.9 (2.6) (0.1) (2.0) (0.9) (4.0) 0.3 2.0 2.8 2.8
GDP per capita growth (2.5) (5.8) (3.4) (5.3) (4.0) (7.0) (2.9) (1.3) (0.5) (0.5)
Current account balance/GDP (8.8) (3.1) (0.5) 7.3 5.8 1.5 4.4 3.0 0.3 (0.2)
Gross external financing needs/CAR&FXR 94.4 89.4 83.7 76.7 85.7 96.0 100.7 99.4 107.4 108.9
Narrow net external debt/CAR 35.3 86.5 84.2 80.0 103.1 195.1 164.4 168.3 177.6 184.5
GG balance/GDP (2.9) (3.8) (6.3) 3.1 0.7 (2.4) 1.0 0.5 0.1 0.2
GG net debt/GDP 24.2 50.0 58.5 82.0 91.6 110.9 100.4 94.8 91.1 87.2
CPI inflation 5.5 30.7 29.8 19.6 17.1 22.3 20.0 16.0 10.0 10.0
Bank credit to resident private sector/GDP 24.8 20.5 16.5 14.3 13.9 12.1 10.8 11.1 11.6 12.0
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Azerbaijan (BB+/Stable /B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 1
  • Fiscal assessment – Debt burden: 1
  • Monetary assessment: 5
Outlook: Stable

The stable outlook reflects our expectation that the ceasefire agreement between Azerbaijan, Armenia, and Russia will broadly hold, underpinning a reduction in war-related security, financial sector, and balance-of-payments risks.

It also reflects our view that a rebound in economic activity and comparatively higher hydrocarbon prices will, over the next 12 months, prevent Azerbaijan's fiscal and external positions from deteriorating materially from strong levels.

We could lower the ratings if another outbreak of military confrontation leads to a deterioration in Azerbaijan's security situation, its balance of payments position, or the stability of the domestic financial system. This is not our baseline scenario.

Beyond the recent conflict, we could also lower the ratings if Azerbaijan's fiscal and external balances weaken more than we project. This could happen, for example, as a result of a substantial decline in hydrocarbon revenue, increased fiscal pressure from the COVID-19 pandemic-induced economic slowdown, or higher government capital expenditure compared with our baseline assumptions.

Rating pressure could also build if Azerbaijan's real per capita GDP growth falls further below that of peers with similar levels of economic development.

Conversely, we could consider an upgrade if external surpluses were higher than we expect, resulting in further external asset accumulation. This could happen, for example, if hydrocarbon revenue increases markedly.

Ratings upside could also build if the government implements reforms addressing some of Azerbaijan's structural impediments, including constraints to monetary policy effectiveness stemming from high financial dollarization and a still-weak domestic banking system.

Table 6

Azerbaijan
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 5.5 3.9 4.2 4.8 4.8 4.2 4.9 5.1 5.2 5.4
GDP growth 1.1 (3.1) 0.1 1.4 2.5 (4.3) 2.4 5.7 3.7 2.2
GDP per capita growth (0.1) (4.2) (1.0) 0.5 1.6 (5.1) 1.6 4.9 2.8 1.4
Current account balance/GDP (0.4) (3.6) 4.1 12.8 9.1 (3.5) 2.8 4.8 3.1 3.2
Gross external financing needs/CAR&FXR 82.9 111.9 104.7 84.5 87.4 105.7 93.2 90.7 93.1 93.9
Narrow net external debt/CAR (85.9) (58.5) (62.4) (58.2) (76.9) (125.1) (95.8) (94.3) (96.6) (99.8)
GG balance/GDP (4.0) 0.5 0.8 7.6 11.0 (5.8) 0.3 1.7 1.0 1.1
GG net debt/GDP (70.1) (51.1) (40.0) (42.0) (50.4) (53.8) (46.9) (46.0) (45.7) (44.9)
CPI inflation 4.0 12.4 12.9 2.3 2.6 2.8 2.7 2.9 2.6 2.7
Bank credit to resident private sector/GDP 45.3 29.2 16.2 16.3 18.4 20.6 18.7 18.5 18.8 18.8
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Bahrain (B+/Negative/B)

Rating score 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: Negative

The negative outlook reflects the increasing risks to the government's ability to service external debt and maintain confidence in the exchange rate peg. This is because fiscal reform measures may prove insufficient to stabilize debt to GDP and Bahrain's external and monetary positions remain weak due to continued pressure on foreign exchange reserves.

We could lower the ratings over the next year if the government's budgetary consolidation measures prove insufficient to restrain an increasing debt and debt-servicing burden. We could also lower the ratings if foreign currency reserves remain low, limiting the government's ability to service external debt in a timely manner and weighing on monetary policy effectiveness. In addition, the ratings could come under pressure if Bahrain's large banking system faces a withdrawal of short-term external financing, including from nonresident depositors.

We could revise the outlook to stable over the next year if the government's budgetary position and the economy's reserve position improve significantly beyond our expectations.

Table 7

Bahrain
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 22.7 22.6 23.6 25.1 25.9 23.5 24.7 25.3 25.8 26.4
GDP growth 2.5 3.6 4.3 1.7 2.0 (5.8) 2.7 2.3 2.3 2.3
GDP per capita growth (1.7) (0.3) (1.1) 1.6 3.3 (5.1) 2.2 (0.2) 0.3 0.3
Current account balance/GDP (2.4) (4.6) (4.1) (6.5) (2.1) (9.4) (4.4) (4.8) (5.2) (5.2)
Gross external financing needs/CAR&FXR 307.4 362.0 352.5 329.6 367.2 386.8 363.9 350.7 348.0 342.0
Narrow net external debt/CAR (51.3) (47.9) (47.6) (26.2) (43.2) (42.8) (35.4) (33.0) (30.6) (27.8)
GG balance/GDP (13.0) (13.5) (10.0) (6.3) (4.7) (12.6) (5.5) (4.8) (5.1) (4.5)
GG net debt/GDP 42.1 58.1 65.6 75.2 83.0 115.8 117.0 118.4 120.5 122.0
CPI inflation 1.9 2.8 1.4 2.1 1.0 (2.3) 2.0 2.0 2.0 2.0
Bank credit to resident private sector/GDP 64.7 64.1 62.7 65.4 65.2 77.3 76.0 75.4 75.2 74.9
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Belarus (B/Negative/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 5
Outlook: Negative

S&P Global Ratings' outlook on Belarus is negative. It indicates our view of high risks to the financial stability of the domestic banking system, much of which is publicly controlled. Residents' conversion to foreign currencies and partial deposit withdrawals in the aftermath of the disputed presidential election last year remain a risk. In a downside case, this could deplete the Belarus central bank's available foreign exchange reserves and present contingent liability risks for the government.

More broadly, we also consider that the increased uncertainty seen since the disputed presidential election could persist. This, in turn, could weigh on Belarus' economic growth and constrain its ability to access foreign capital markets over the next 12 months, putting pressure on the ratings.

We could lower the ratings on Belarus if we did not consider the government's access to foreign capital markets to be assured and if additional credit lines from bilateral lenders, such as Russia and China, proved insufficient to comfortably meet upcoming public debt redemptions. We could also lower the ratings if resident deposit withdrawals and conversions to foreign currency continued unchecked and depleted the central bank's foreign currency reserves, while presenting financial stability and contingent liability risks.

We could revise the outlook to stable if lingering political uncertainty was replaced by a clear way forward to Belarus' economic, fiscal, and financial sector stability.

(research update last published April 4, 2020)

Table 8

Belarus
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 6.0 5.0 5.8 6.4 6.8 6.4 6.3 6.4 6.6 6.8
GDP growth (3.8) (2.5) 2.5 3.1 1.5 (1.0) 0.5 1.5 2.0 2.5
GDP per capita growth (3.9) (2.7) 2.5 3.3 1.7 (0.8) 1.2 1.5 2.0 2.5
Current account balance/GDP (3.2) (3.4) (1.7) 0.0 (1.9) (0.4) (1.2) (2.1) (2.3) (2.1)
Gross external financing needs/CAR&FXR 163.3 163.6 143.4 128.5 125.9 123.0 126.1 132.0 133.2 133.3
Narrow net external debt/CAR 87.8 89.5 72.7 60.0 59.4 77.7 75.8 79.2 80.4 80.4
GG balance/GDP 1.4 1.5 3.0 4.0 2.4 (1.7) (3.8) (1.7) 0.5 1.0
GG net debt/GDP 30.1 33.1 30.9 27.2 23.3 30.5 36.5 38.9 39.6 39.5
CPI inflation 13.5 11.8 6.0 4.9 5.6 5.6 8.3 6.0 5.0 5.0
Bank credit to resident private sector/GDP 45.0 40.8 38.9 38.3 38.3 43.0 44.0 43.9 43.9 43.7
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Benin (B+/Stable/B)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment – Flexibility and performance: 3
  • Fiscal assessment – Debt burden: 5
  • Monetary assessment: 5
Outlook: Stable

The stable outlook indicates that we expect Benin's credit metrics can withstand the shock to public finances and economic activity from COVID-19. Once the pandemic's effects abate, we anticipate high economic growth will resume, supported by continued reform momentum following the re-election of the incumbent President. This includes implementation of a new government action plan (PAG) building on the previous one, an increase in public and private investments, as well as structural economic and budgetary reforms, with measures to improve the business environment, agricultural output, and tax collection.

We could raise the ratings if, following the pandemic, reforms boost economic growth beyond our forecast, reflecting a higher component of private-sector investment and activity; and net government debt as a share of GDP decreases beyond our projections.

We could lower the ratings if budgetary performance deteriorates and reforms lag, leading to significantly weaker real GDP growth rates than we currently forecast. This could occur if COVID-19's impact is more protracted than we anticipate; or if the presidential elections in 2021 has led to larger-than-expected public expenditure.

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 across the monetary union and weigh considerably on the West African Economic and Monetary Union (WAEMU) member state's fiscal performance.

(research update last published June 20, 2020)

Table 9

Benin
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 1.1 1.1 1.1 1.2 1.2 1.3 1.4 1.4 1.5 1.6
GDP growth 1.8 3.3 5.7 6.7 6.9 3.8 5.0 6.5 6.5 6.5
GDP per capita growth (1.1) 0.4 2.7 3.7 3.9 0.9 2.2 3.6 3.6 3.6
Current account balance/GDP (6.0) (3.0) (4.2) (4.6) (4.0) (3.7) (3.4) (3.5) (3.5) (3.5)
Gross external financing needs/CAR&FXR 135.1 121.5 137.7 121.4 140.8 120.7 123.7 119.2 114.0 110.0
Narrow net external debt/CAR 32.4 50.1 49.5 79.2 66.3 83.1 75.1 69.9 65.5 62.5
GG balance/GDP (5.6) (4.3) (4.2) (2.9) (0.5) (4.8) (4.5) (2.9) (2.5) (2.0)
GG net debt/GDP 22.1 28.9 32.8 32.4 31.2 36.8 39.1 39.1 38.7 37.7
CPI inflation 0.3 (0.6) 1.6 0.9 (0.9) 1.7 1.0 1.0 1.2 1.2
Bank credit to resident private sector/GDP 18.5 18.6 18.0 18.0 19.5 18.9 18.7 18.2 17.6 17.1
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Bosnia and Herzegovina (B/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 4
  • Fiscal assessment – Flexibility and performance: 3
  • Fiscal assessment – Debt burden: 2
  • Monetary assessment: 6
Outlook: Stable

The stable outlook balances the risks associated with COVID-19's effect on BiH's economy and fiscal and external metrics over the next 12 months against upside potential from implementing structural reforms and our expectation of stronger economic growth over the medium term.

We could lower the ratings on BiH if the economic and budgetary costs of the pandemic are materially higher than we currently project--such that the sustainability of the public debt burden is at risk--given the fixed exchange rate regime and limited monetary policy flexibility. The ratings may also come under pressure if the stability of the domestic financial system weakens substantially in a hypothetical scenario of prolonged deterioration in asset quality, or persistent deposit conversion to foreign currency. We could also lower the ratings if BiH implemented a debt payment moratorium that affected the timely and full service of its commercial debt, but this is not our baseline scenario.

We could raise the ratings on BiH if domestic policy settings improved, and we saw a move toward less-confrontational and more consensus-based politics, oriented to promoting economic growth and structural reforms. This could be underpinned by a full International Monetary Fund (IMF) program in addition to the Rapid Financing Instrument (RFI) arrangement agreed with the IMF in 2020. We could also raise the ratings if economic recovery proved stronger than we currently anticipate.

(research update last published Aug. 29, 2020)

Table 10

Bosnia and Herzegovina
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 4.9 5.2 5.6 6.2 6.2 6.2 6.8 7.2 7.6 8.0
GDP growth 4.2 3.6 3.6 3.1 2.9 (4.5) 2.5 2.5 2.8 2.8
GDP per capita growth 5.8 4.9 4.7 4.0 3.6 (3.9) 3.0 3.0 3.3 3.3
Current account balance/GDP (4.9) (4.6) (4.7) (3.3) (3.0) (3.1) (2.6) (2.6) (2.6) (2.4)
Gross external financing needs/CAR&FXR 140.3 133.7 128.8 126.7 129.2 132.8 128.8 131.2 131.5 130.4
Narrow net external debt/CAR 39.6 33.1 23.1 14.9 8.5 2.8 11.2 10.5 10.1 9.7
GG balance/GDP 0.6 1.2 2.5 2.2 1.9 (3.0) (2.0) (0.5) 0.5 0.5
GG net debt/GDP 35.3 33.9 29.1 26.8 24.6 29.0 30.8 30.9 30.0 29.1
CPI inflation (1.0) (1.1) 1.2 1.4 0.6 (1.0) 0.7 1.3 1.3 1.3
Bank credit to resident private sector/GDP 51.4 51.1 52.3 52.5 53.2 52.9 51.4 50.7 50.3 49.9
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Botswana (BBB+/Negative/A-2)

Rating score snapshot:
  • Institutional assessment: 3
  • Economic assessment: 5
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 3
  • Fiscal assessment – Debt burden: 1
  • Monetary assessment: 4
Outlook: Negative

The negative outlook reflects the risks that the impact of the COVID-19 pandemic continues to pose to Botswana's economic and fiscal performance over the next 12 months. These are primarily linked to the performance of the global diamond industry, on which the country depends substantially.

We could lower our ratings on Botswana if fiscal or external performance were weaker than our forecasts. This could happen, for instance, if demand for diamonds or prices failed to recover sustainably following a large contraction in 2020. Botswana's fiscal and external assets have declined over the past few years, which makes the country more vulnerable to volatility in the diamond industry.

We could revise the outlook to stable if Botswana's budgetary performance improves, in turn helping preserve the remaining fiscal and balance-of-payment buffers.

Table 11

Botswana
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 6.8 7.2 7.9 8.3 8.0 6.8 7.7 7.8 8.1 8.5
GDP growth (1.7) 4.3 2.9 4.5 3.0 (7.7) 6.0 3.0 4.0 4.5
GDP per capita growth (3.2) 2.4 0.8 2.2 0.8 (9.6) 3.9 1.0 2.0 2.5
Current account balance/GDP 2.1 7.7 5.3 0.6 (7.6) (10.6) (6.9) (6.7) (5.8) (4.0)
Gross external financing needs/CAR&FXR 54.7 53.0 54.8 60.4 69.3 71.3 78.0 81.7 82.6 81.0
Narrow net external debt/CAR (62.6) (52.8) (63.9) (54.6) (58.0) (50.4) (30.9) (20.2) (16.2) (14.3)
GG balance/GDP (4.8) 0.7 (1.1) (4.7) (5.6) (8.0) (5.0) (3.0) (2.0) (1.0)
GG net debt/GDP (7.7) (3.3) (4.9) (2.1) 3.0 11.2 15.4 17.6 18.4 18.1
CPI inflation 3.0 2.8 3.3 3.2 2.8 1.9 4.0 4.0 4.0 4.0
Bank credit to resident private sector/GDP 35.2 31.4 31.4 32.2 33.5 37.9 37.0 37.7 38.0 38.1
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Bulgaria (BBB/Stable/A-2)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 2
  • Fiscal assessment – Debt burden: 1
  • Monetary assessment: 5
Outlook: Stable

The stable outlook reflects that, following a relatively limited contraction last year, we expect Bulgaria's economic recovery over the next two years will not incur any external or financial sector imbalances. This should enable quick fiscal consolidation and keep public debt low.

We could raise the ratings if Bulgaria's economic recovery coincides with quicker fiscal consolidation or stronger external performance than we currently project. In the long run, we could raise the ratings on Bulgaria in the course of its accession to the eurozone.

We could lower the ratings if the economic contraction proves deeper or the subsequent recovery is delayed. This would likely result in protracted fiscal consolidation and continuously rising net public debt over the next few years. Although unlikely over the medium term, we could also take a negative rating action if we observe the emergence of imbalances in Bulgaria's financial sector.

(latest research update published Nov. 28, 2020)

Table 12

Bulgaria
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 7.0 7.5 8.3 9.4 9.8 9.9 11.1 11.9 12.6 13.3
GDP growth 4.0 3.8 3.5 3.1 3.7 (4.2) 2.9 4.3 3.5 3.3
GDP per capita growth 4.6 4.5 4.3 3.9 4.4 (3.5) 3.4 4.8 4.0 3.8
Current account balance/GDP 0.0 3.1 3.3 1.0 1.8 (0.7) 0.6 1.5 1.4 1.1
Gross external financing needs/CAR&FXR 118.6 107.8 100.1 104.2 103.8 108.8 108.1 108.0 108.8 108.8
Narrow net external debt/CAR (16.1) (24.1) (30.0) (31.9) (34.0) (45.5) (40.4) (40.3) (41.0) (41.0)
GG balance/GDP (1.7) 0.2 1.2 2.0 2.1 (3.4) (2.8) (1.9) (1.1) (0.9)
GG net debt/GDP 18.1 16.9 14.6 12.6 11.9 17.2 19.2 20.0 20.0 19.8
CPI inflation (1.1) (1.3) 1.2 2.6 2.5 1.2 1.5 1.7 2.0 2.0
Bank credit to resident private sector/GDP 57.0 54.4 52.9 53.7 54.0 57.0 57.2 57.0 56.6 56.4
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Burkina Faso (B/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 4
  • Fiscal assessment – Flexibility and performance: 5
  • Fiscal assessment – Debt burden: 3
  • Monetary assessment: 5
Outlook: Stable

The stable outlook reflects S&P Global Ratings' view that the adverse effects of the COVID-19 pandemic will not lead to a long-lasting deterioration of Burkina Faso's economic growth and creditworthiness. We expect the authorities will revert to their pre-pandemic budgetary consolidation path after 2021. Meanwhile, we expect the escalating security crisis in the Sahel region to have only a moderate impact on the country's economic and fiscal performance over 2021-2024.

We could lower our ratings if Burkina Faso is unable to build on the institutional progress it has made since 2015, or if security risks escalate, to the point of hindering the country's main export industries.

Alternatively, we would consider lowering the ratings if the country's fiscal deficit widens beyond our expectations. We could also lower our ratings if pressures on the exchange rate of the West African CFA franc (XOF) to the euro were to emerge, or if the WAEMU's international reserves fell significantly below our expectations.

We would consider raising our ratings if Burkina Faso's fiscal policies continue to support declining government deficits, leading to a reduction in public debt and financing costs.

(research update last published May 16, 2020)

Table 13

Burkina Faso
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 0.7 0.7 0.7 0.8 0.8 0.8 0.9 0.9 1.0 1.0
GDP growth 3.9 6.0 6.2 6.7 5.7 1.4 6.0 5.5 5.5 5.5
GDP per capita growth 1.0 3.1 2.9 3.5 2.5 (1.7) 2.8 2.3 2.3 2.3
Current account balance/GDP (7.6) (6.1) (6.4) (4.1) (3.3) 3.5 (1.9) (3.9) (5.2) (4.5)
Gross external financing needs/CAR&FXR 143.9 137.5 139.4 133.0 129.6 106.8 121.9 123.2 127.9 125.8
Narrow net external debt/CAR 60.0 44.2 38.5 43.7 39.0 51.6 47.6 55.0 64.2 65.0
GG balance/GDP (1.2) (2.9) (6.9) (4.3) (2.7) (5.2) (5.4) (4.3) (3.5) (3.0)
GG net debt/GDP 25.9 25.5 27.3 32.3 36.7 40.7 42.9 44.1 44.3 44.1
CPI inflation 0.7 0.4 1.5 2.0 (3.2) 1.9 2.7 2.6 2.5 2.5
Bank credit to resident private sector/GDP 28.8 28.1 28.9 29.8 30.8 32.7 32.3 32.3 32.6 33.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Cameroon (B-/Stable/B)

Rating score snapshot:
  • Institutional assessment: 6
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 3
  • Monetary assessment: 5
Outlook: Stable

The stable outlook balances S&P Global Ratings' view of Cameroon's robust economic growth prospects against risks from rising external public debt and a volatile security situation in the Anglophone and Far North regions.

We could lower our ratings if external imbalances and fiscal deficits increase beyond our expectations, leading to a decline in government liquid external assets and casting doubts on Cameroon's ability to service its debt.

We would consider raising our ratings if Cameroon's fiscal policies support declining government deficits beyond the pandemic and external financing needs ease significantly, thanks to structurally lower current account deficits (CADs) and a declining external debt stock. Alternatively, we could raise the ratings if Cameroon's security threats recede.

(research update last published April 11, 2020)

Table 14

Cameroon
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 1.3 1.4 1.4 1.5 1.5 1.5 1.6 1.7 1.7 1.8
GDP growth 5.7 4.7 3.6 4.1 3.7 0.4 3.2 3.5 4.2 4.5
GDP per capita growth 2.9 1.9 0.9 1.4 1.1 (2.1) 0.7 1.0 1.7 2.0
Current account balance/GDP (3.8) (3.2) (3.4) (3.5) (4.3) (4.7) (3.8) (3.1) (4.0) (3.6)
Gross external financing needs/CAR&FXR 97.7 89.6 103.5 102.3 103.6 107.3 105.2 100.6 101.1 103.1
Narrow net external debt/CAR 36.2 59.4 81.7 88.5 94.3 140.2 112.7 103.2 111.4 108.0
GG balance/GDP (4.4) (6.1) (4.9) (2.6) (3.4) (4.1) (2.6) (2.3) (2.9) (2.1)
GG net debt/GDP 19.7 23.4 24.3 28.9 33.0 36.2 38.1 38.9 39.9 40.0
CPI inflation 2.7 0.9 0.6 1.1 2.5 2.5 2.5 2.5 2.5 2.5
Bank credit to resident private sector/GDP 18.3 18.4 17.5 18.8 17.8 17.2 17.3 17.4 17.4 17.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Cape Verde (B-/Stable/B)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 6
  • Monetary assessment: 5
Outlook: Stable

The stable outlook balances our expectation of gradual economic recovery and the availability of supportive foreign donor grant- and loan facilities, against the risk of lower medium-term economic growth prospects and rising financing pressures as a result of the global pandemic.

We could lower the ratings if fiscal outcomes substantially worsened relative to our current expectations. This could result if the tourism and aviation sectors failed to sustainably recover. It could also be due to contingent liabilities, for example, from the state-owned enterprises or private sector, crystallizing on the government's balance sheet, raising the risk of nonpayment on government-guaranteed debt.

We could raise the ratings if Cape Verde's balance-of-payment outcomes significantly strengthened, limiting the need to borrow externally, and allowing foreign exchange reserves to accumulate. We could also raise the rating if budgetary performance improved, bringing the government debt-to-GDP ratio onto a discernible downward path over the medium term.

Table 15

Cape Verde
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 3.0 3.1 3.3 3.6 3.6 3.1 3.4 3.6 3.8 4.0
GDP growth 1.0 4.7 3.7 4.5 5.7 (14.9) 5.5 4.1 4.1 5.0
GDP per capita growth (0.2) 3.4 2.5 3.3 4.5 (15.7) 4.4 3.0 3.0 3.9
Current account balance/GDP (3.2) (3.9) (7.9) (5.2) (0.4) (16.0) (13.4) (10.3) (8.0) (4.7)
Gross external financing needs/CAR&FXR 145.5 135.8 137.6 137.4 128.8 165.7 181.4 170.8 164.9 153.3
Narrow net external debt/CAR 115.1 96.7 109.4 96.4 87.5 164.3 145.1 140.6 131.9 116.0
GG balance/GDP (4.0) (3.5) (3.1) (2.7) (1.8) (9.0) (8.5) (6.5) (4.5) (3.0)
GG net debt/GDP 106.0 105.4 104.2 107.2 101.6 126.3 127.3 126.6 123.8 118.6
CPI inflation 0.1 (1.4) 0.8 1.3 1.1 0.7 0.9 1.5 1.8 1.8
Bank credit to resident private sector/GDP 63.6 63.1 64.6 62.8 61.3 75.1 73.1 71.8 70.3 68.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Democratic Republic of Congo (CCC+/Stable/C)

Rating score 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: Stable

S&P Global Ratings' stable outlook on the Democratic Republic of Congo (DRC) reflects the balance between the continued adverse effects of COVID-19 on DRC's economy, budget, and balance of payments; and substantial emergency financial support received from partners and relatively solid medium-term prospects on the back of higher mining production, reduced domestic tensions, and renewed relations with the international community.

We could raise the ratings if, following the pandemic, the government secures sufficient structural financial support from international partners and continues to make payments on commercial debt on time and in full.

We could lower the ratings if budgetary and external tensions continue to increase and foreign-exchange reserves decrease beyond our projections, given the country's very low buffers. This could occur if COVID-19's impact is more protracted than we anticipate or if the current outbreaks of other infectious diseases start to hurt the economy. We could also lower the ratings if domestic or security tensions escalate, threatening DRC's already-weak institutions and fragile economy.

(research update last published July 31, 2020)

Table 16

Congo, D.R.
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 0.5 0.5 0.5 0.6 0.6 0.5 0.5 0.6 0.6 0.6
GDP growth 6.9 2.4 3.7 5.8 4.4 1.7 4.5 4.5 5.0 5.0
GDP per capita growth 3.4 (0.9) 0.4 2.5 1.1 (1.6) 1.2 1.2 1.6 1.6
Current account balance/GDP (3.9) (4.1) (3.3) (3.6) (3.6) (4.1) (2.5) (2.7) (2.8) (2.8)
Gross external financing needs/CAR&FXR 103.9 106.3 108.1 108.3 109.8 113.3 108.8 105.2 102.6 101.3
Narrow net external debt/CAR 18.9 19.4 17.2 18.6 20.2 27.6 25.3 22.4 20.8 20.2
GG balance/GDP (0.3) (1.1) 0.3 (0.1) (0.6) (1.2) (1.0) (0.5) (0.5) (0.5)
GG net debt/GDP 11.2 14.1 14.1 10.5 11.5 12.0 12.0 11.8 11.7 11.6
CPI inflation 0.7 2.9 33.9 33.2 5.5 15.8 9.0 7.0 5.0 5.0
Bank credit to resident private sector/GDP 6.5 7.8 5.8 6.4 7.2 8.4 8.1 7.6 7.3 6.9
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Congo-Brazzaville (CCC+/Stable/C)

Rating score snapshot:
  • Institutional assessment: 6
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 6
  • Monetary assessment: 5
Outlook: Stable

The stable outlook on Congo-Brazzaville reflects the balance between S&P Global Ratings' expectation of improving oil prices and volumes, against ongoing institutional risks, high general government debt, and limited financial buffers.

We could lower the ratings if the situation deteriorates beyond our current expectations. This could occur for example if the COVID-19 pandemic has a more protracted negative effect on Congo-Brazzaville's economy, or oil prices were less supportive than we envisage, further pressuring the country's public finances and external position.

Conversely, we could raise our ratings if the government's fiscal position improves and financial buffers increase, for example, government assets or international reserves at the central bank.

(research update last published Sept. 4, 2020)

Table 17

Congo-Brazzaville
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 1.9 1.6 1.8 2.3 2.1 1.5 1.7 1.8 1.8 1.8
GDP growth 4.8 (2.6) (2.7) 1.4 (1.1) (7.0) (0.5) 3.0 0.5 (0.2)
GDP per capita growth 2.2 (5.1) (5.2) (1.2) (3.6) (9.3) (3.0) 0.4 (2.1) (2.7)
Current account balance/GDP (50.8) (60.9) (3.4) 7.9 8.3 (6.6) (3.7) (2.6) (4.9) (5.9)
Gross external financing needs/CAR&FXR 102.0 162.9 118.5 105.1 103.0 123.1 126.1 119.4 121.3 124.5
Narrow net external debt/CAR 91.0 199.9 162.9 111.4 109.5 244.1 195.6 169.1 171.6 170.1
GG balance/GDP (11.2) (8.4) (4.5) 6.2 6.7 (3.0) (1.0) 1.0 1.0 1.0
GG net debt/GDP 38.1 88.5 105.5 84.0 87.3 121.2 112.7 104.3 101.2 98.9
CPI inflation 3.2 3.2 0.5 1.2 0.3 0.6 2.0 2.5 2.8 2.8
Bank credit to resident private sector/GDP 22.7 26.6 23.1 17.4 16.5 26.8 25.2 24.5 25.0 25.7
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Croatia (BBB-/Stable/A-3)

Rating score 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 outlook is stable because S&P Global Ratings anticipates that Croatia's external buffers and economic recovery prospects will offset risks for the country's balance of payments and fiscal performance resulting mainly from the impact of COVID-19 on the tourism sector.

We could lower the ratings on Croatia if, contrary to our expectations, external financing pressure was to build or if public finances failed to recover over the coming two to three years, pushing public debt up.

We could raise the ratings over the next two to three years if Croatia's economy, and thus its GDP per capita, expanded faster than we currently project. In the longer term, all else equal, the country's adoption of the euro would also be beneficial for its credit quality.

(research update last published Sept. 19, 2020)

Table 18

Croatia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 11.8 12.4 13.5 15.0 15.0 13.8 15.3 16.3 17.1 17.8
GDP growth 2.4 3.5 3.4 2.8 2.9 (8.4) 5.1 3.5 2.6 2.6
GDP per capita growth 3.3 4.2 4.7 3.7 3.4 (8.0) 5.3 3.7 2.8 2.8
Current account balance/GDP 3.3 2.2 3.9 1.6 2.7 (0.6) (0.5) (0.4) (0.4) (0.5)
Gross external financing needs/CAR&FXR 101.6 99.7 93.2 91.5 87.9 86.0 86.3 84.1 83.6 83.0
Narrow net external debt/CAR 90.8 71.4 58.3 40.0 29.5 34.5 28.0 24.7 20.3 16.5
GG balance/GDP (3.5) (0.9) 0.8 0.3 0.4 (7.8) (2.9) (2.0) (1.5) (1.5)
GG net debt/GDP 76.0 74.5 71.3 68.5 65.2 77.4 74.3 72.8 71.3 69.8
CPI inflation (0.5) (1.1) 1.1 1.5 0.8 0.1 1.0 1.5 1.6 1.6
Bank credit to resident private sector/GDP 67.3 62.9 59.0 57.3 56.4 63.2 62.2 61.6 61.4 61.2
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Egypt (B/Stable/B)

Rating score 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 reflects our expectation that the pressures on external and government debt metrics will be temporary and gradually decline from 2022, supported by growth in GDP and current account receipts (CARs).

We could consider a negative rating action if the COVID-19 pandemic's impact on Egypt's external position and economic activity is more severe or prolonged than expected, resulting in a substantial decline in foreign exchange reserves and reduced ability to service debt and interest payments. Rating pressure could also emerge if fiscal slippages, higher borrowing costs, or pronounced currency depreciation prevented Egypt's government debt-to-GDP ratio from declining after 2021.

We could consider a positive rating action over the medium term if Egypt's economic expansion significantly outperforms our forecasts, or if the reform program materially narrows government and external financing needs, reducing debt and indicating a track record of stronger governance.

Table 19

Egypt
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 3.7 3.7 2.5 2.6 3.1 3.6 3.8 4.2 4.5 4.9
GDP growth 4.4 4.4 4.2 5.3 5.6 3.6 2.5 4.8 5.4 5.6
GDP per capita growth 1.8 2.1 (0.4) 3.3 4.5 1.0 0.5 2.8 3.3 3.5
Current account balance/GDP (3.7) (6.0) (6.1) (2.4) (3.6) (3.1) (3.6) (3.2) (2.5) (2.3)
Gross external financing needs/CAR&FXR 110.2 117.3 121.2 112.6 114.2 115.3 120.9 125.3 121.1 118.7
Narrow net external debt/CAR 27.9 60.4 67.6 68.8 79.7 105.2 120.0 116.2 108.3 105.1
GG balance/GDP (11.6) (13.7) (10.6) (9.6) (8.0) (7.0) (7.1) (6.3) (6.1) (6.0)
GG net debt/GDP 78.7 84.7 88.7 81.6 75.0 77.5 79.6 78.3 76.3 74.4
CPI inflation 11.0 10.2 23.3 21.6 13.9 5.7 5.0 7.0 7.2 7.2
Bank credit to resident private sector/GDP 28.2 29.8 32.7 28.1 26.0 27.7 30.9 30.9 31.1 31.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Ethiopia (B-/Watch Negative/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 3
  • Monetary assessment: 5
CreditWatch: Negative

The CreditWatch negative placement reflects the risk that Ethiopia could include commercial creditors in its government debt restructuring plans.

We could eventually lower the ratings to 'SD' (selective default) if the government undertakes a debt exchange offer with commercial creditors, which we would consider a distressed debt exchange based on our criteria. We would also consider a downgrade if we conclude that Ethiopia is unwilling or unable to service the interest payments on its commercial obligations, including the Eurobond interest payment due June 11, 2021, before the grace period of 14 days expires.

We could affirm the rating and remove it from CreditWatch if it becomes clear that Ethiopia's commercial obligations will not be included in the upcoming debt restructuring.

(research update last published Feb. 12, 2021)

Table 20

Ethiopia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 0.7 0.8 0.9 0.9 1.0 1.1 1.0 1.0 1.0 1.0
GDP growth 10.4 8.0 10.1 7.7 9.0 6.1 0.7 5.1 6.0 6.5
GDP per capita growth 7.8 5.5 7.5 5.3 6.7 3.9 (1.7) 2.6 3.5 4.0
Current account balance/GDP (13.5) (11.0) (9.9) (7.9) (7.4) (5.5) (6.7) (5.7) (5.3) (5.0)
Gross external financing needs/CAR&FXR 175.7 165.8 174.7 162.5 165.1 160.9 178.3 175.1 172.5 169.9
Narrow net external debt/CAR 161.1 169.9 192.2 190.8 200.6 232.2 286.3 276.5 272.3 271.4
GG balance/GDP (2.3) (1.9) (3.3) (3.0) (2.5) (2.8) (3.4) (2.0) (1.9) (1.9)
GG net debt/GDP 21.0 22.8 25.5 28.3 26.5 27.9 31.1 30.9 30.2 29.8
CPI inflation 7.7 9.7 7.4 14.6 12.6 19.9 20.2 16.6 14.1 12.8
Bank credit to resident private sector/GDP 30.7 31.6 33.7 34.2 35.2 33.9 33.9 32.8 31.4 30.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Georgia (BB/Negative/ B)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment – Flexibility and performance: 3
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 4
Outlook: Negative

The negative outlook reflects risks to Georgia's ability to generate adequate foreign exchange (FX) earnings to service its sizable external liabilities over our forecast horizon. The recovery in the tourism sector is likely to lag the global rollout of vaccines, and we do not project a return to 2019 levels of tourist activity through 2024. Coupled with a more volatile domestic political and policy environment, this could cloud the medium-term outlook for foreign investment inflows-–important for growth and external financing, in our view.

We could lower the ratings over the next year if:

  • We believed economic growth prospects would be materially weaker for longer, endangering the consolidation of Georgia's fiscal and external finances; or
  • Financing for Georgia's twin deficits continued to reorient toward debt-creating foreign flows, rather than equity-like flows.

We could revise the outlook back to stable if FX earnings recover faster than we anticipate, fostering a reduction of external imbalances.

Table 21

Georgia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 4.0 4.1 4.4 4.7 4.7 4.2 4.2 4.4 4.7 5.0
GDP growth 3.0 2.9 4.8 4.8 5.0 (6.1) 4.0 4.2 4.5 4.5
GDP per capita growth 2.9 2.7 4.9 4.8 5.2 (5.9) 4.1 4.3 4.6 4.6
Current account balance/GDP (11.8) (12.5) (8.0) (6.8) (5.5) (12.6) (12.5) (10.8) (10.1) (9.5)
Gross external financing needs/CAR&FXR 116.8 122.2 117.6 117.4 115.1 127.8 124.6 125.8 127.2 129.2
Narrow net external debt/CAR 95.2 105.1 90.8 83.5 80.6 128.7 137.6 136.3 135.0 134.1
GG balance/GDP (2.3) (2.7) (3.0) (2.1) (3.0) (9.5) (7.6) (4.5) (3.0) (2.5)
GG net debt/GDP 32.6 36.0 35.4 35.7 37.3 54.8 61.4 61.9 61.0 59.6
CPI inflation 4.0 2.1 6.0 2.6 4.9 5.2 4.0 3.5 3.0 3.0
Bank credit to resident private sector/GDP 46.9 54.1 54.9 59.6 65.0 79.7 84.7 88.3 91.5 94.7
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Ghana (B-/Stable/B)

Rating score 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 risks from fiscal and external financing pressures against the country's strong medium-term economic growth prospects.

We could lower the rating in the next six to 12 months if we saw further deterioration of Ghana's fiscal metrics, either due to recurring wide fiscal deficits or the materialization of contingent liabilities in the financial or energy sectors. Downward pressure on the ratings could also materialize if external pressures build--for example, because of wider current account deficits or accelerated nonresident outflows, which would erode Ghana's usable foreign exchange reserves.

We could raise our ratings should Ghana implement faster fiscal consolidation measures to alleviate pressure on public finances, without jeopardizing the government's ability to maintain balanced economic growth.

(research update last published Sept. 12, 2020)

Table 22

Ghana
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 1.8 1.9 2.0 2.2 2.2 2.2 2.3 2.4 2.5 2.6
GDP growth 2.2 3.5 8.1 6.3 6.5 0.5 4.5 5.1 5.1 5.1
GDP per capita growth (0.1) 1.2 5.8 4.0 4.2 (1.6) 2.3 2.9 2.9 2.9
Current account balance/GDP (5.7) (5.2) (3.4) (3.1) (2.7) (2.8) (3.5) (3.2) (3.4) (3.4)
Gross external financing needs/CAR&FXR 125.1 131.1 122.4 119.7 125.3 123.6 123.9 123.1 124.6 125.1
Narrow net external debt/CAR 128.1 135.2 125.9 118.8 102.6 124.2 127.4 131.3 137.5 142.0
GG balance/GDP (5.0) (10.2) (4.8) (7.0) (7.4) (13.5) (8.3) (6.0) (5.5) (5.5)
GG net debt/GDP 52.3 52.8 51.3 54.1 58.6 68.5 70.7 69.8 68.7 67.6
CPI inflation 17.2 17.5 12.4 9.8 8.4 8.7 9.5 9.0 10.0 9.0
Bank credit to resident private sector/GDP 16.1 15.3 15.3 12.6 13.2 14.0 14.8 15.5 16.3 17.1
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Hungary (BBB/Stable/A-2)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 3
Outlook: Stable

The stable outlook reflects our expectation that, following an extraordinary fiscal deficit in 2020, the government's efforts to consolidate public balances will be protracted, even after the pandemic. We also anticipate that net general government debt levels will stabilize at about 80% of GDP. The outlook also factors in our anticipation of resilient growth for the country post-pandemic, as well as high EU fund inflows.

We could lower the ratings if fiscal deterioration proved even deeper and more protracted than we expect over the next two years, potentially permanently weakening public finances. We could also lower the ratings if we observed a significant delay in the availability of EU funds, leading to higher net external debt and weighing on our assessment of external liquidity. This could reduce our expectations of the economic recovery in the near term. Further pressure could build if the Hungarian Central Bank (MNB) diverged markedly from its free-floating exchange rate policy, for example by becoming more interventionist in the foreign exchange market.

Although unlikely in the near term, we could raise the ratings if authorities consolidated public finances faster than we project after 2021, resulting in lower increases of public debt over the next two years. This scenario would likely coincide with strong absorption of EU funds, which could result in net external deleveraging of the economy, as well as high economic growth over the next few years.

Table 23

Hungary
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 12.7 13.1 14.6 16.4 16.7 15.9 17.7 18.9 19.9 21.0
GDP growth 3.8 2.1 4.3 5.4 4.6 (5.0) 4.3 4.9 3.3 3.0
GDP per capita growth 4.1 2.4 4.7 5.6 4.7 (4.9) 4.4 5.1 3.5 3.2
Current account balance/GDP 2.4 4.5 2.0 0.3 (0.5) 0.1 (0.2) (0.7) (0.7) (0.8)
Gross external financing needs/CAR&FXR 102.0 99.7 103.7 105.0 102.7 101.2 99.9 98.5 97.1 96.1
Narrow net external debt/CAR 39.0 32.3 30.4 22.3 21.8 25.3 21.4 18.2 15.5 13.3
GG balance/GDP (2.0) (1.8) (2.4) (2.1) (2.1) (8.1) (6.9) (5.5) (4.5) (4.0)
GG net debt/GDP 73.1 70.6 69.3 65.3 62.6 72.7 74.0 74.2 74.4 74.1
CPI inflation 0.1 0.5 2.4 2.9 3.4 3.4 3.8 3.3 3.0 3.0
Bank credit to resident private sector/GDP 41.8 41.1 38.5 38.7 40.3 45.4 45.0 43.8 43.2 42.8
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Iraq (B-/Stable/B)

Rating score snapshot:
  • Institutional assessment: 6
  • Economic assessment: 6
  • External assessment: 4
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 6
  • Monetary assessment: 5
Outlook: Stable

The stable outlook reflects our view that Iraq's foreign exchange reserves will continue to comfortably exceed external debt-servicing obligations over the next 12 months. It also assumes that Iraq will meet its domestic financing needs largely through indirect borrowing from the Central Bank of Iraq (CBI), increasing the money supply.

We could lower the ratings if significant pressure on Iraq's foreign currency reserves and exchange-rate regime resulted in a sharp drop in reserve coverage of external debt-servicing requirements. This could occur, for instance, due to increased central bank intervention in the foreign exchange market, possibly triggered by a further dollarization of household deposits, or the inflationary effects of CBI monetization of an elevated budgetary deficit. Furthermore, Iraq's domestic political landscape and external security backdrop remain unpredictable. We could also consider a downgrade if we perceived that weaknesses in the sovereign's institutional framework had reduced the government's ability or willingness to service debt.

We could upgrade Iraq in the medium term if higher-than-expected growth, for instance from reinvigorated reconstruction efforts, boosted the country's economic growth and GDP per capita. Improvements to the government's fiscal position, including increasing revenue diversification and containing the public sector wage bill, would also support a higher rating. Moreover, institutional reforms could also improve our opinion on the government's debt-servicing capacity.

Table 24

Iraq
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 5.0 4.8 5.2 5.8 6.0 4.0 3.7 3.9 4.2 4.3
GDP growth 2.5 15.2 (2.5) (0.6) 4.4 (11.5) 1.0 2.9 3.5 2.8
GDP per capita growth (0.9) 11.9 (4.9) (2.8) 2.1 (13.5) (1.3) 0.6 1.2 0.5
Current account balance/GDP (1.6) 1.2 7.6 15.3 6.7 (3.9) 5.8 5.9 7.7 7.6
Gross external financing needs/CAR&FXR 52.2 49.6 49.4 45.1 52.0 53.0 47.6 46.5 44.7 44.3
Narrow net external debt/CAR 2.0 22.3 18.4 (7.9) (16.1) (9.6) (13.1) (17.6) (20.9) (26.1)
GG balance/GDP (12.8) (13.9) (1.6) 7.9 (4.7) (16.5) (8.0) (8.0) (7.0) (6.7)
GG net debt/GDP 46.9 55.3 49.2 33.0 33.5 70.3 70.1 74.2 74.0 76.6
CPI inflation 1.4 (0.7) 0.2 0.4 (0.2) 0.6 5.0 2.0 2.0 2.0
Bank credit to resident private sector/GDP 12.8 12.9 12.0 9.5 9.6 14.2 13.2 13.0 12.4 12.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 1
  • External assessment: 1
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 2
Outlook: Stable

The stable outlook balances the elevated political and security uncertainty, and pandemic-induced deterioration of Israel's fiscal position, against the country's persistently resilient economy and strong balance of payments. We forecast that Israel's net external asset position will amount to just under 50% of GDP over the next two years, providing the economy with substantial buffers to withstand the current tensions.

We could take a positive rating action if political and security risks tied to the current flare-up reduce significantly, and fiscal outturns prove materially stronger than our current projections, helping to sustainably reduce net general government debt.

Pressure on the ratings could build if security and political risks tied to the current flare-up are protracted, affecting Israel's economic, fiscal, and balance-of-payments metrics. We could also take a negative rating action if pandemic-related risks were to resurface, for example due to the emergence of a vaccine-resistant strain of the virus that undermined economic recovery and deteriorated public finances substantially more than we currently forecast.

Table 25

Israel
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 35.8 37.3 40.5 41.7 43.6 43.7 48.8 50.9 53.2 55.9
GDP growth 2.3 3.8 3.6 3.5 3.5 (2.6) 5.0 4.0 3.5 3.5
GDP per capita growth 0.2 1.8 1.6 1.5 1.5 (4.4) 2.9 2.0 1.5 1.5
Current account balance/GDP 5.2 3.7 2.9 2.7 3.2 5.1 3.3 3.3 3.1 2.9
Gross external financing needs/CAR&FXR 70.6 68.9 68.8 66.3 65.1 60.2 57.5 54.0 54.0 53.9
Narrow net external debt/CAR (34.7) (41.2) (54.1) (46.6) (51.3) (67.2) (75.4) (74.7) (74.4) (74.1)
GG balance/GDP (1.7) (2.0) (2.2) (4.3) (4.6) (11.9) (8.5) (4.5) (4.0) (4.0)
GG net debt/GDP 61.8 60.0 58.4 58.8 58.6 71.0 75.3 75.9 76.1 75.9
CPI inflation (0.6) (0.5) 0.2 0.8 0.8 (0.6) 1.2 1.2 1.5 2.0
Bank credit to resident private sector/GDP 70.8 70.1 70.3 71.3 70.7 75.1 74.0 73.1 72.3 71.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Jordan (B+/Stable/B)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 3
  • Fiscal assessment – Debt burden: 6
  • 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 reasonably low, against the risk that the fiscal performance is significantly weaker than our current projections.

We could lower our ratings on Jordan if we were to project much higher debt accumulation by the central government or state-owned enterprises, which could weaken our view of the government's institutional ability to stabilize public finances. We could also lower the ratings if funding sources became strained, for example if the currently strong bilateral and multilateral donor support were to diminish.

We could raise the ratings if Jordan's external imbalances narrowed sharply and foreign investment were to rebound, boosting foreign exchange reserves. A positive rating action could also be supported by a substantial reduction in net government debt. A notable improvement in economic growth prospects spurred by government structural reforms and in particular those relating to investment, competitiveness and reducing the costs of doing business--such as energy costs--would also support the ratings.

(related research last published Sept. 12, 2020)

Table 26

Jordan
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 4.0 4.0 4.1 4.1 4.2 4.0 4.1 4.2 4.3 4.4
GDP growth 2.6 2.1 2.1 1.9 3.7 (1.6) 2.0 2.0 3.0 3.0
GDP per capita growth (5.5) (0.4) (0.5) (0.6) 1.3 (3.9) (0.3) (0.3) 0.7 0.7
Current account balance/GDP (9.2) (9.8) (10.8) (7.0) (2.1) (6.1) (6.3) (6.1) (5.7) (4.5)
Gross external financing needs/CAR&FXR 145.8 148.7 157.7 150.6 149.4 177.8 181.7 184.0 184.0 179.3
Narrow net external debt/CAR 16.0 21.9 30.4 42.0 40.2 64.5 70.7 76.5 78.2 75.8
GG balance/GDP (0.7) (0.0) 0.5 0.5 (0.6) (4.6) (1.8) (1.0) 0.5 1.0
GG net debt/GDP 68.5 68.3 67.8 68.7 72.6 82.3 85.1 86.1 84.7 82.3
CPI inflation (0.9) (0.8) 3.3 4.5 0.8 0.3 1.5 2.0 2.6 2.5
Bank credit to resident private sector/GDP 71.0 76.5 81.1 82.9 82.1 89.3 91.2 92.5 94.2 95.5
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Kazakhstan (BBB-/Stable/A-3)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 2
  • Fiscal assessment – Debt burden: 2
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that the government and external balance sheets will remain strong over the next two years. We also expect continuity of policymaking.

We could lower the ratings if Kazakhstan's external balances were to deteriorate, for instance due to a sharp and prolonged fall in hydrocarbon revenue, evidenced by gross external financing needs exceeding 100% of current account receipts plus usable reserves.

Slower-than-anticipated fiscal consolidation, weakening the government's strong asset position, could also put downward pressure on the ratings.

We could raise the ratings if we saw improvements in institutional effectiveness and policymaking predictability, evidenced for instance by significant progress on the government's diversification plans and efforts to strengthen the private sector.

A meaningful improvement in the health of the banking sector, for example, supported by further advances in regulatory oversight or improvements in corporate governance, could improve our view on monetary policy effectiveness, and reduce risks to the government's fiscal position.

Table 27

Kazakhstan
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 10.4 7.7 9.2 9.8 9.7 9.1 9.6 10.1 10.6 11.0
GDP growth 1.2 1.1 4.1 4.1 4.5 (2.6) 3.2 3.6 3.9 3.2
GDP per capita growth (1.7) (0.3) 2.7 2.8 3.2 (3.9) 1.9 2.3 2.6 1.9
Current account balance/GDP (3.3) (5.9) (3.1) (0.1) (4.0) (3.7) (2.1) (2.2) (2.3) (2.3)
Gross external financing needs/CAR&FXR 109.9 100.9 94.3 90.1 96.1 94.7 88.0 89.0 89.9 90.3
Narrow net external debt/CAR (55.6) (64.4) 1.7 (37.1) (36.6) (38.5) (46.2) (46.7) (47.6) (51.5)
GG balance/GDP (8.5) (4.0) (4.0) (1.2) (0.5) (7.2) (2.5) (0.5) 0.3 0.8
GG net debt/GDP (38.6) (25.7) (3.3) (14.3) (11.4) (3.7) (5.3) (5.6) (7.1) (9.3)
CPI inflation 6.6 14.6 7.4 6.0 5.4 6.8 6.8 6.0 5.5 5.0
Bank credit to resident private sector/GDP 42.9 37.1 28.3 25.3 23.8 24.8 23.1 21.8 20.7 19.8
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Kenya (B/Stable/B)

Rating score snapshot:
  • Institutional assessment: 4
  • 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 our expectation of an economic recovery and the availability of supportive foreign donor facilities against the risk of rising fiscal and external pressures.

We could lower the ratings if Kenya's path to economic recovery and efforts to curb its fiscal deficits prove inadequate, pushing domestic or external debt up significantly, and/or weakening external liquidity beyond our current projections. We could also lower the ratings if Kenya enters into debt restructuring arrangements, with adverse credit implications for commercial (non-official) creditors.

We could raise the ratings if we see a significant and sustained improvement in Kenya's fiscal and external accounts. We could also raise the ratings if Kenya reverts to strong GDP growth and fiscal consolidation more rapidly than expected, which would in turn help address debt vulnerabilities.

Table 28

Kenya
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 1.3 1.4 1.6 1.7 1.8 1.8 1.8 1.9 2.0 2.0
GDP growth 5.7 5.9 4.8 6.3 5.4 0.2 4.4 5.4 5.6 5.6
GDP per capita growth 3.1 3.4 2.4 3.9 3.0 (2.0) 2.0 3.0 3.3 3.3
Current account balance/GDP (6.9) (5.8) (7.2) (5.8) (5.8) (4.6) (5.1) (5.7) (5.5) (5.3)
Gross external financing needs/CAR&FXR 124.1 125.9 133.7 134.7 137.1 139.8 146.2 141.3 134.3 137.7
Narrow net external debt/CAR 93.1 129.3 139.2 136.4 168.2 227.1 219.1 233.1 244.8 257.2
GG balance/GDP (8.0) (7.4) (8.4) (6.7) (7.3) (8.0) (8.7) (7.7) (6.3) (5.8)
GG net debt/GDP 41.3 45.3 45.9 48.1 52.5 59.9 64.3 66.8 67.5 67.6
CPI inflation 6.6 6.3 8.0 4.7 7.4 5.4 5.4 5.1 5.2 5.2
Bank credit to resident private sector/GDP 42.0 40.2 36.1 34.2 28.9 30.1 29.9 28.9 28.2 27.4
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Kuwait (AA-/Negative/A-1+)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 1
  • Fiscal assessment – Flexibility and performance: 1
  • Fiscal assessment – Debt burden: 1
  • Monetary assessment: 3
Outlook: Negative

The negative outlook reflects our view of short- and medium-term risks stemming from fiscal pressure, including the continued depletion of the GRF--the government's main source of budget funding--for which alternative financing arrangements are not yet in place. It also highlights the medium-term risks from Kuwait's persistently slow structural reform progress, particularly compared with other regional sovereigns.

We could lower the ratings over the next six-to-12 months if Kuwait's institutional settings prevent the government from finding a sustainable long-term solution to its funding needs. In an extreme case, an insufficient policy response could leave Kuwait facing a hard fiscal budget constraint, potentially resulting in a disorderly expenditure adjustment that could inflict long-term damage on the economy.

We could also lower the ratings if broader reform efforts--such as taxation and labor market changes, and measures to diversify the economy--remain sluggish, intensifying the burden on Kuwait's fiscal metrics over the medium term. Additionally, ratings could come under pressure if we consider that Kuwait's monetary policy flexibility has reduced or regional geopolitical tensions materially deteriorated, potentially disrupting key trade routes.

We could revise the outlook to stable if the authorities swiftly addressed Kuwait's fiscal pressures and funding constraints in tandem with a program of structural reforms that enhanced institutional effectiveness and improved long-term economic prospects.

Table 29

Kuwait
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 27.0 24.8 26.8 30.4 28.2 23.1 26.9 29.1 29.5 30.3
GDP growth 0.6 2.9 (4.7) 1.3 0.4 (7.0) 0.0 7.0 4.0 1.0
GDP per capita growth (2.9) (1.1) (6.6) (1.4) (2.8) (4.9) 0.5 7.5 4.5 1.5
Current account balance/GDP 3.5 (4.6) 8.0 14.2 16.5 17.8 8.1 10.9 8.0 6.3
Gross external financing needs/CAR&FXR 124.6 143.2 118.6 111.0 114.8 128.6 135.6 134.8 141.4 145.4
Narrow net external debt/CAR (633.3) (682.1) (601.3) (517.1) (566.2) (685.3) (678.6) (619.9) (629.3) (623.8)
GG balance/GDP 11.4 10.3 12.6 16.5 11.9 (2.0) 3.9 7.4 6.8 7.3
GG net debt/GDP (479.0) (489.8) (451.1) (409.7) (442.8) (549.6) (480.4) (456.4) (459.2) (456.1)
CPI inflation 3.7 3.5 1.5 0.6 1.1 2.1 2.0 2.0 2.0 2.0
Bank credit to resident private sector/GDP 106.3 113.9 105.2 93.5 101.5 129.9 117.4 113.0 115.4 116.1
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Lebanon (SD/SD)

Rating score 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: --

The Lebanese government has defaulted on its foreign currency debt obligations. The negative outlook on the local currency rating reflects that the government will likely decide to restructure its local currency debt as part of a broader restructuring program. We do not assign outlooks to 'SD' (selective default) or 'D' (default) ratings because they express a condition and not a forward-looking opinion of default probability.

We could lower the local currency sovereign rating to 'SD' if the government signals that it will restructure local currency debt in addition to the Eurobonds.

We could raise the local currency rating if we perceived that the likelihood of a distressed exchange of Lebanon's local currency commercial debt had decreased. This could be the case if, for example, significant donor funding support were to materialize, allowing the government a window to implement transformative reforms, or if meaningful reforms led to sustained strong economic growth.

We would raise our long-term foreign currency sovereign issuer credit and issue ratings from 'SD' and 'D', respectively, upon completion of the government's bond restructuring. The ratings would reflect Lebanon's post-restructuring creditworthiness, considering the resulting debt burden and macroeconomic policy prospects. Our post-restructuring ratings tend to be in the 'CCC' or low 'B' categories, depending on the sovereign's new debt structure and capacity to support that debt.

(research update last published March 11, 2020)

Table 30

Lebanon
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 8.6 8.6 8.8 8.1 7.8 8.1 10.6 11.6 12.0 12.4
GDP growth 0.6 1.6 0.8 (1.7) (7.2) (25.0) (10.0) 1.0 1.0 1.5
GDP per capita growth (3.7) (1.0) (0.5) (12.8) (7.1) (24.7) (10.0) 1.1 1.1 1.6
Current account balance/GDP (21.2) (24.6) (27.1) (27.7) (21.4) (2.3) (2.6) (3.0) (4.3) (4.8)
Gross external financing needs/CAR&FXR 116.2 126.1 125.1 130.7 142.7 126.0 126.0 119.6 122.8 124.0
Narrow net external debt/CAR (61.3) (68.1) (49.4) (26.2) (7.7) (10.4) 3.2 6.2 9.0 11.6
GG balance/GDP (7.9) (9.6) (7.0) (11.3) (10.9) (4.9) (5.0) (5.5) (6.0) (6.0)
GG net debt/GDP 111.7 116.8 118.9 125.3 139.5 139.6 112.0 108.2 110.8 112.8
CPI inflation (3.8) (0.8) 4.4 6.1 2.9 84.9 90.0 30.0 6.0 6.0
Bank credit to resident private sector/GDP 96.0 99.3 100.2 93.7 82.0 57.3 44.8 42.7 43.0 43.1
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Montenegro (B/Stable/B)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 6
  • Monetary assessment: 6
Outlook: Stable

The stable outlook reflects our view that, despite the erosion of Montenegro's fiscal space from the pandemic, there are no immediate pressures from higher debt levels over the next 12 months. Montenegro has accumulated sizable cash buffers through prefunding and we estimate that these are enough to cover all upcoming government debt payments in 2021. The stable outlook also assumes that successful vaccine distribution in Montenegro and in Europe in 2021 will allow for a gradual re-opening of Montenegro's tourism industry, which should support economic recovery over the medium term.

The ratings could come under pressure if Montenegro's economy does not rebound as we expect over 2021-2022, in turn further straining the already weak fiscal position. We could also lower the ratings if the fiscal position continues to deteriorate for other reasons, resulting in net general government debt continuing to rise in contrast with our current expectations that it will stabilize at under 80% of GDP. This could be the case if the government is unable to control current spending over the medium term or undertakes large additional debt-financed projects. That said, we currently view imminent pressures on Montenegro's debt sustainability as unlikely.

We could raise the ratings if Montenegro's fiscal prospects improve compared with our baseline expectations. This could be the case if the tourism sector stages a faster comeback and underpins higher growth, in turn supporting Montenegro's budgetary performance and balance-of-payments position.

Table 31

Montenegro
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 6.5 7.0 7.8 8.9 8.9 7.7 8.7 9.4 10.1 10.8
GDP growth 3.4 3.0 4.7 5.1 4.1 (15.2) 5.8 5.0 4.0 3.5
GDP per capita growth 3.4 2.9 4.7 5.1 4.1 (15.2) 5.7 5.0 4.0 3.5
Current account balance/GDP (11.0) (16.2) (16.1) (17.0) (15.0) (26.0) (21.7) (17.6) (16.3) (14.8)
Gross external financing needs/CAR&FXR 131.9 137.5 131.8 130.7 122.9 136.7 118.0 129.6 136.0 142.7
Narrow net external debt/CAR 157.0 154.3 165.2 150.6 157.2 275.3 216.6 199.8 193.3 184.7
GG balance/GDP (8.3) (3.6) (5.3) (3.9) (2.0) (10.5) (7.0) (4.5) (3.0) (2.5)
GG net debt/GDP 62.7 61.1 60.1 59.0 58.3 80.3 82.3 80.6 78.3 75.9
CPI inflation 1.5 (0.3) 2.4 2.6 0.4 (0.3) 1.0 2.0 2.2 2.2
Bank credit to resident private sector/GDP 51.3 50.1 49.9 50.1 50.5 61.5 59.7 58.0 56.8 56.0
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Morocco (BB+/Stable/B)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 3
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 3
Outlook: Stable

The stable outlook on Morocco reflects our expectation that an economic recovery, alongside further structural economic and budgetary reforms, will help counterbalance fiscal pressures.

We could lower the ratings if the government's fiscal results materially underperform our expectations, for example, due to crystallization of contingent liabilities on the government's balance sheet. Additional rating pressure could emerge if, contrary to our current forecasts, external imbalances widen, resulting in a pronounced increase in the economy's gross financing needs.

We could raise the ratings if budgetary consolidation is markedly faster than expected, or the ongoing transition toward a more flexible exchange rate bolsters Morocco's external competitiveness. We could also raise the ratings if the country's continuing economic diversification strategy yields less volatile and higher rates of economic growth, significantly raising the economy's GDP per capita.

Table 32

Morocco
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 2.9 2.9 3.1 3.3 3.3 3.1 3.4 3.6 3.7 3.9
GDP growth 4.5 1.1 4.3 3.2 2.5 (6.7) 5.0 3.9 3.6 3.6
GDP per capita growth 3.1 (0.3) 2.9 1.9 1.2 (7.8) 3.8 2.7 2.4 2.4
Current account balance/GDP (2.1) (4.1) (3.4) (5.3) (3.7) (1.5) (3.4) (2.7) (2.7) (2.5)
Gross external financing needs/CAR&FXR 93.7 92.4 92.7 94.5 94.1 89.6 85.4 85.4 86.6 87.2
Narrow net external debt/CAR 32.7 34.2 31.4 30.8 30.7 31.3 29.9 29.1 28.1 26.3
GG balance/GDP (4.2) (4.5) (3.5) (3.8) (4.1) (7.7) (6.5) (5.7) (5.2) (4.6)
GG net debt/GDP 47.0 48.9 52.8 54.3 55.1 66.3 68.3 70.1 71.3 71.9
CPI inflation 1.6 1.6 0.8 1.8 0.3 0.7 0.9 1.3 1.5 1.5
Bank credit to resident private sector/GDP 77.9 79.0 76.8 75.6 75.4 83.1 80.5 78.7 77.6 76.6
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Mozambique (CCC+/Stable/C)

Rating score 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 external and fiscal deficits against S&P Global Ratings' expectation of a return to positive economic growth in 2021, supported by large investments in the extractive sectors.

We could lower the ratings if Mozambique's economic performance were to weaken substantially, for example, due to a sharp increase in security risks related to the insurgency in the northern Cabo Delgado province, which could negatively affect large gas projects.

We could consider raising the ratings if we observe significant improvement in economic performance or fiscal or external positions, over and above our base-case assumptions.

(research update last published Oct. 24, 2020)

Table 33

Mozambique
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 0.6 0.4 0.5 0.5 0.5 0.5 0.4 0.5 0.5 0.5
GDP growth 6.7 3.8 3.7 3.4 2.3 (1.2) 2.5 5.0 5.5 5.5
GDP per capita growth 3.7 0.9 0.8 0.5 (0.6) (4.0) (0.4) 2.0 2.5 2.5
Current account balance/GDP (37.4) (32.2) (19.6) (30.3) (19.6) (27.2) (27.7) (27.6) (28.0) (29.4)
Gross external financing needs/CAR&FXR 170.4 173.5 151.7 160.4 167.6 188.9 201.7 192.4 198.3 205.7
Narrow net external debt/CAR 290.8 357.2 263.8 299.3 293.7 428.4 446.3 425.1 410.8 407.8
GG balance/GDP (4.1) (8.0) (6.5) (8.6) (2.1) (5.3) (7.0) (6.0) (5.0) (4.0)
GG net debt/GDP 76.9 96.6 76.3 77.5 71.6 91.0 94.7 94.8 93.4 91.1
CPI inflation 3.6 19.9 15.1 3.9 2.8 3.1 5.0 5.0 5.0 5.0
Bank credit to resident private sector/GDP 36.0 37.4 28.7 26.3 25.8 29.0 28.7 27.6 26.4 25.3
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Nigeria (B-/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 5
  • Monetary assessment: 5
Outlook: Stable

The stable outlook indicates that COVID-19-related pressures will continue to weigh on Nigeria's GDP growth and fiscal and external metrics, but improving oil prices will support a return to positive GDP growth.

We could raise our ratings if Nigeria experiences significantly stronger economic performance than we currently expect, or if external financing pressures prove to be contained, while fiscal deficits reduce faster than we project.

We could lower the ratings if we saw increasing risks to Nigeria's capacity to repay commercial obligations, either because of declining external liquidity or a continued reduction in fiscal flexibility. This could occur, for instance, if we see significantly higher fiscal deficits or debt-servicing needs, as well as significantly reduced foreign exchange (FX) reserves.

(research update last published Aug. 29, 2020)

Table 34

Nigeria
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 2.7 2.1 1.8 1.8 2.0 2.0 1.9 1.9 1.9 1.9
GDP growth 2.7 (1.6) 0.8 1.9 2.2 (1.8) 1.9 2.2 2.3 2.3
GDP per capita growth (0.0) (4.2) (1.8) (0.7) (0.4) (4.3) (0.7) (0.4) (0.3) (0.3)
Current account balance/GDP (3.2) 0.7 3.0 1.1 (4.2) (3.2) (1.2) (0.6) 1.4 2.0
Gross external financing needs/CAR&FXR 98.6 80.5 75.1 89.5 101.2 115.9 114.2 114.9 109.2 108.5
Narrow net external debt/CAR (3.6) (0.0) 15.2 12.2 38.7 59.5 60.3 66.0 67.4 72.5
GG balance/GDP (3.5) (4.0) (5.4) (4.3) (4.8) (5.5) (5.0) (4.5) (4.0) (4.0)
GG net debt/GDP 11.9 15.1 33.2 44.3 51.3 42.1 44.4 45.9 46.7 47.5
CPI inflation 9.0 15.7 16.5 12.1 11.4 13.3 13.0 11.0 9.0 9.0
Bank credit to resident private sector/GDP 13.5 15.4 13.3 11.3 11.5 11.4 11.2 11.5 11.7 12.0
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

North Macedonia (BB-/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 4
  • External assessment: 3
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 3
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that North Macedonia's projected economic recovery will help rein in fiscal and external deficits over the coming year.

We could raise the ratings if continued reforms strengthened the sovereign's institutional arrangements while preserving sustainable fiscal policies. North Macedonia's EU accession aspirations could remain an anchor for institutional improvements and structural reform progress.

We could lower the ratings if fiscal and current account deficits are higher than we project over the next one-to-two years, coupled with a continuous rise in net government debt or the buildup of external stress. The ratings could also come under pressure if the domestic financial system stability were to weaken materially in a hypothetical scenario of sustained asset quality deterioration and persistent deposit conversion to foreign currency.

Table 35

North Macedonia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 4.9 5.2 5.5 6.1 6.0 5.9 6.5 6.9 7.3 7.7
GDP growth 3.9 2.9 1.1 2.9 3.2 (4.5) 3.6 3.5 3.3 3.2
GDP per capita growth 3.7 2.7 1.0 2.8 3.1 (4.5) 3.5 3.4 3.2 3.1
Current account balance/GDP (1.9) (2.9) (0.9) (0.1) (3.3) (3.5) (2.1) (1.6) (1.4) (1.3)
Gross external financing needs/CAR&FXR 108.3 109.9 106.4 109.4 112.1 114.5 112.6 112.8 110.9 109.2
Narrow net external debt/CAR 26.9 28.3 32.6 24.3 23.2 29.2 28.2 26.1 23.9 21.7
GG balance/GDP (3.4) (2.7) (2.8) (1.1) (2.2) (8.2) (4.9) (3.8) (3.4) (3.1)
GG net debt/GDP 36.4 38.6 40.4 39.3 41.4 50.3 53.6 55.6 56.9 57.5
CPI inflation (0.3) (0.2) 1.4 1.5 0.8 1.2 1.5 1.5 1.7 1.7
Bank credit to resident private sector/GDP 51.1 48.1 48.8 49.0 49.9 54.3 54.6 54.8 55.2 55.6
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Oman (B+/Stable/B)

Rating score 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 balances the still-considerable fiscal and external pressures on Oman over the next 12 months, against the government's reasonably high fiscal buffers. We expect the increase in government net debt to remain elevated through 2024, but it should decelerate relative to 2020, on the back of higher oil prices and the government's fiscal reform plan.

We could raise our ratings if planned fiscal reforms reduce the accumulation and stock of net government debt over the medium term, or if growth prospects improve significantly more than we expect.

We could consider lowering the rating if we saw significant risks to fiscal reform implementation, which could signal reduced government capability and willingness to maintain sustainable public finances, and result in external financing needs increasing beyond our current expectations.

Table 36

Oman
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 15.9 14.4 15.2 17.2 16.4 14.4 16.7 17.1 16.8 17.1
GDP growth 4.6 5.1 0.4 0.9 (0.8) (5.9) 1.3 5.2 2.0 1.8
GDP per capita growth (0.8) (0.3) (1.6) 0.7 (1.2) (2.0) (0.5) 3.7 0.5 0.3
Current account balance/GDP (16.0) (19.2) (15.6) (5.4) (5.4) (13.9) (4.8) (5.5) (8.3) (8.5)
Gross external financing needs/CAR&FXR 128.1 165.2 142.9 126.3 122.5 142.9 132.9 131.9 127.6 128.3
Narrow net external debt/CAR (78.2) (21.5) 18.9 24.5 36.4 68.3 57.3 58.9 68.6 76.0
GG balance/GDP (17.3) (17.5) (13.1) (8.0) (7.9) (15.8) (4.5) (4.6) (5.7) (5.5)
GG net debt/GDP (58.9) (29.1) (10.7) (5.9) (3.1) 13.6 16.8 22.0 29.6 35.4
CPI inflation 0.1 1.1 1.6 0.9 0.1 (0.9) 3.5 2.0 2.0 2.0
Bank credit to resident private sector/GDP 75.6 86.4 85.6 80.5 86.5 104.8 94.5 96.2 102.5 104.8
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Poland (A-/Stable/A-2)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 2
  • Monetary assessment: 2
Outlook: Stable

The stable outlook reflects the balance between macroeconomic risks stemming from COVID-19 and the buffers provided by the country's strong external and government balance sheets.

The ratings could come under pressure if the impact of the pandemic materially weakened Poland's economic recovery and medium-term growth prospects, also leading to the government's fiscal position deteriorating significantly beyond our expectations. Ratings downside could also materialize in case of materially weaker EU transfers to Poland, for instance as a result of political tensions between Poland and EU authorities. The crystallization of fiscal contingent liabilities from emergency policy measures or the government's increasing share of the financial system could also lead to a negative rating action.

We could raise the ratings if, following the temporary shock, Poland's strong economic performance were to resume and boost income levels without creating external imbalances.

(research update last published Oct. 3, 2020)

Table 37

Poland
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 12.6 12.5 13.9 15.5 15.7 15.7 16.7 17.9 18.7 19.4
GDP growth 4.2 3.1 4.8 5.4 4.5 (2.7) 4.5 5.4 3.3 2.2
GDP per capita growth 4.3 3.3 4.8 5.3 4.6 (2.7) 3.4 4.5 3.0 2.7
Current account balance/GDP (0.9) (0.8) (0.4) (1.3) 0.5 3.6 0.7 (1.2) (2.0) (3.1)
Gross external financing needs/CAR&FXR 90.7 90.5 89.9 92.2 88.5 83.0 84.6 86.5 87.7 89.4
Narrow net external debt/CAR 56.6 48.7 50.1 36.9 31.0 25.6 20.1 18.1 17.4 19.0
GG balance/GDP (2.6) (2.4) (1.5) (0.2) (0.7) (8.5) (5.5) (3.0) (2.9) (2.9)
GG net debt/GDP 48.8 50.7 47.7 45.2 42.2 52.1 56.4 56.6 57.4 58.3
CPI inflation (0.7) (0.2) 1.6 1.2 2.1 3.6 3.8 2.7 2.4 2.3
Bank credit to resident private sector/GDP 59.0 59.2 57.4 57.6 56.0 57.7 58.3 58.6 59.5 60.6
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 1
  • External assessment: 4
  • Fiscal assessment – Flexibility and performance: 1
  • Fiscal assessment – Debt burden: 2
  • Monetary assessment: 4
Outlook: Stable

The stable outlook indicates our view that Qatar's credit profile will remain strong over the next two years, supported by its wealthy economy and large government and external net asset positions. We expect that the economic rebound from 2021 and higher hydrocarbon prices will result in twin (fiscal and external) surpluses.

A negative rating action could follow if we observe a marked deterioration in Qatar's currently strong fiscal balance sheet or net external asset position. This could happen, for example, because of a prolonged decline in hydrocarbon revenue compared with our assumptions and without a sufficient fiscal policy response. Significant capital outflows and larger or persistent current account deficits could reduce the country's external buffers and weaken its ability to absorb additional shocks.

We could consider raising the ratings if Qatar's political institutions develop in line with those of similarly rated peers outside the region, and we observe a marked increase in transparency, including greater clarity on the government's external assets.

(research update last published May 9, 2020)

Table 38

Qatar
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 66.8 58.4 61.0 68.6 63.7 54.5 59.2 62.2 62.2 62.8
GDP growth 4.8 3.1 (1.5) 1.2 0.8 (3.7) 1.8 2.2 1.7 1.4
GDP per capita growth (3.4) (3.9) (3.2) 0.0 (2.4) (0.9) (0.2) 0.2 0.1 (0.1)
Current account balance/GDP 8.5 (5.5) 4.0 9.1 2.4 (2.5) 1.6 2.4 3.4 4.0
Gross external financing needs/CAR&FXR 106.0 144.5 156.8 175.2 194.2 223.2 239.4 239.6 253.6 260.3
Narrow net external debt/CAR (153.9) (151.6) (102.3) (99.5) (94.7) (83.3) (73.8) (70.9) (79.8) (86.0)
GG balance/GDP (5.5) (2.9) (1.6) 7.9 7.4 6.0 6.5 6.4 7.5 8.5
GG net debt/GDP (114.4) (120.7) (97.2) (93.8) (101.7) (126.8) (121.1) (119.3) (125.1) (130.5)
CPI inflation 1.8 2.7 0.4 0.3 (0.8) (2.7) 2.8 2.1 2.0 1.8
Bank credit to resident private sector/GDP 99.2 109.6 110.0 106.1 129.7 172.0 163.2 164.4 170.1 174.1
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Ras al Khaimah (A-/Stable/A-2)

Rating score 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 reflects S&P Global Ratings' expectation that RAK's government will maintain its prudent fiscal stance over the next two years and that GDP growth will average a moderate 2.5% over 2021-2024.

We could lower the ratings over the next two years if the government's strong fiscal position were to deteriorate, for example if weaker-than-expected economic activity resulted in the rapid accumulation of government debt. We could also lower the ratings if debt-service costs significantly increased.

Although unlikely over the next two years, we could raise the ratings if the economy materially strengthens.

(research update last published Oct. 24, 2020)

Table 39

Ras Al Khaimah
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 27.5 27.8 27.9 28.3 28.5 28.3 28.8 29.2 29.6 29.9
GDP growth 1.3 4.6 1.5 2.8 2.4 (5.0) 3.0 2.3 2.3 2.3
GDP per capita growth (1.7) 1.7 (1.4) 0.2 (0.5) 0.0 0.0 (0.2) (0.2) (0.2)
Current account balance/GDP N/A 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 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 N/A
GG balance/GDP 1.4 1.7 0.9 1.8 1.9 2.5 0.8 0.9 1.0 1.0
GG net debt/GDP (9.7) (3.8) (4.9) (5.3) (7.6) (8.0) (8.4) (9.0) (9.7) (10.3)
CPI inflation 3.0 (0.4) 2.4 4.2 (1.9) (0.7) 1.7 1.5 1.5 1.5
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 N/A
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Romania (BBB-/Stable/A-3)

Rating score 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: Stable

The stable outlook indicates that we view the government's fiscal consolidation agenda as credible and anticipate that Romania's public and external finances will stabilize over the next two years. In our view, risks from Romania's still-elevated twin deficits are mitigated by the prospect of sizable EU funds deployment, the government's stated reform ambitions, and a return to economic growth. We forecast that GDP growth will average 5% in 2021-2022.

We could lower the ratings if:

  • Romania's efforts to rebalance its budget endanger the consolidation of its fiscal and external finances; or
  • Financing for Romania's twin deficits is oriented toward debt-creating foreign flows, signaling an inability to absorb EU funding sources and restore foreign direct investment (FDI) flows.

We could raise the ratings if reforms strengthened Romania's institutional arrangements, giving it a more-robust fiscal framework and limiting the potential for costly policy reversals. Aside from making Romania's fiscal design more predictable, these reforms would likely revitalize foreign investor interest in Romania's real economy and thus make the sovereign less externally fragile.

Table 40

Romania
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 8.9 9.5 10.8 12.4 12.9 12.9 14.6 15.2 16.2 17.3
GDP growth 3.0 4.7 7.3 4.5 4.1 (3.9) 5.0 4.7 4.5 4.0
GDP per capita growth 3.4 5.3 8.0 5.1 4.8 (3.4) 5.3 5.0 4.8 4.3
Current account balance/GDP (0.8) (1.6) (3.1) (4.7) (4.9) (5.2) (5.2) (5.2) (5.4) (5.2)
Gross external financing needs/CAR&FXR 102.4 103.9 100.8 102.7 103.2 101.5 97.4 101.6 104.5 106.5
Narrow net external debt/CAR 43.6 31.3 33.0 26.5 26.2 33.6 39.4 43.4 46.6 47.0
GG balance/GDP (0.6) (2.6) (2.6) (2.9) (4.4) (9.3) (7.0) (5.5) (4.5) (3.0)
GG net debt/GDP 31.8 29.9 29.0 29.6 32.0 42.4 48.0 50.3 50.9 50.1
CPI inflation (0.4) (1.1) 1.1 4.1 3.9 2.3 3.0 3.0 3.5 3.5
Bank credit to resident private sector/GDP 31.0 29.2 27.5 26.7 25.6 27.1 26.1 25.1 24.2 23.4
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Russia (BBB-/Stable/A-3)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 1
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 1
  • Monetary assessment: 3
Outlook: Stable

The stable outlook reflects our expectation that Russia's strong external and fiscal balance sheets would be able to absorb risks to fiscal or financial stability stemming from lower oil prices, the effects of the COVID-19 pandemic, and possible additional international sanctions.

Pressure on the rating could build should materially tighter international sanctions lead to significant capital outflows and elevated financial stability risks. We could also take a negative rating action if the government's balance sheet were to deteriorate substantially. This could result from, for example, a more permanent loosening of Russia's fiscal framework or the crystallization of contingent liabilities in the state-owned corporate or financial sectors.

In the absence of additional major external shocks, we could take a positive rating action if Russia's GDP per capita trend growth improved, for instance, because of the government's pro-growth policy measures. We could also take a positive rating action if the government were to rebuild fiscal buffers, which would help mitigate commodity-related revenue volatility, and take effective measures to address long-term fiscal pressures from an aging population.

Table 41

Russia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 9.4 8.7 10.7 11.3 11.5 10.1 11.1 11.7 12.3 13.0
GDP growth (2.0) 0.2 1.8 2.8 2.0 (3.0) 3.7 2.5 2.0 2.0
GDP per capita growth (2.2) 0.0 1.7 2.8 2.1 (2.9) 3.3 2.6 2.1 2.1
Current account balance/GDP 5.0 1.9 2.0 7.0 3.8 2.3 3.9 3.3 2.2 1.9
Gross external financing needs/CAR&FXR 70.2 72.1 70.0 56.3 61.4 58.9 58.4 59.6 60.9 61.7
Narrow net external debt/CAR (48.3) (52.9) (52.1) (57.4) (68.9) (90.3) (83.7) (90.3) (96.0) (97.4)
GG balance/GDP (3.4) (4.5) (1.5) 2.9 1.9 (4.0) (1.1) 0.3 (0.1) (0.5)
GG net debt/GDP 4.2 8.5 9.7 5.4 2.8 8.9 8.9 7.7 7.3 7.6
CPI inflation 15.5 7.0 3.7 2.9 4.5 3.4 5.7 4.1 4.0 4.0
Bank credit to resident private sector/GDP 62.2 59.5 59.7 59.3 61.5 71.5 70.4 71.4 72.9 74.4
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Rwanda (B+/Negative/B)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 4
Outlook: Negative

The negative outlook reflects that Rwanda's large current account deficits could weaken the external balance sheet more than we currently expect, particularly if the COVID-19 pandemic puts a deeper strain on exports, tourism, and inward remittances for longer than we expect. The outlook also indicates that large fiscal deficits could make financing more complicated, crowding out banks' credit to the private sector, despite the still-favorable funding structure dominated by cheap concessional debt.

We could lower the ratings over the next six-to-12 months if Rwanda's external position weakened further compared with our base-case forecasts. This could happen, for example, if exports, tourism inflows, or inward remittances remain below expectations.

The ratings could also come under pressure if the Rwandan government's debt burden continued to rise due to larger and more sustained fiscal imbalances than expected, with increased reliance on domestic financing crowding out banks' credit to the private sector.

Rating pressure could also build if Rwanda's medium-term growth prospects deteriorated significantly and its real per capita GDP growth rate slowed compared with that of peers with similar levels of economic development.

We could revise our outlook to stable if Rwanda is able to reduce its accumulation of external debt, supported by smaller twin deficits than we currently expect.

Table 42

Rwanda
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.9 0.9
GDP growth 8.9 6.0 4.0 8.6 9.5 (3.4) 4.4 6.5 7.4 7.4
GDP per capita growth 6.0 4.1 1.3 5.9 6.8 (5.6) 2.4 4.4 5.3 5.3
Current account balance/GDP (12.7) (15.3) (9.3) (10.2) (12.1) (11.0) (11.9) (11.1) (9.8) (9.5)
Gross external financing needs/CAR&FXR 117.6 128.0 112.5 110.8 114.6 109.5 103.4 104.1 111.8 111.7
Narrow net external debt/CAR 86.1 107.2 107.2 108.4 124.7 149.4 165.2 178.3 182.1 187.9
GG balance/GDP (4.0) (3.3) (4.6) (4.2) (5.5) (8.7) (9.0) (7.6) (6.6) (5.6)
GG net debt/GDP 30.2 38.1 41.5 45.0 51.0 59.7 67.3 70.9 72.8 73.7
CPI inflation 2.5 5.7 4.8 1.4 2.4 7.7 2.5 4.5 4.2 4.2
Bank credit to resident private sector/GDP 19.4 19.5 19.3 20.4 20.7 21.0 21.0 21.0 20.9 20.7
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 4
  • External assessment: 1
  • Fiscal assessment – Flexibility and performance: 5
  • Fiscal assessment – Debt burden: 1
  • Monetary assessment: 4
Outlook: Stable

The stable outlook indicates that we expect Saudi Arabia's government and external net asset positions over the next two years will remain sufficiently strong to support the ratings.

We could lower our ratings if we observed fiscal weakening and an erosion of the government's net asset position beyond our expectations, or a sharp deterioration in the sovereign's external position. A sustained rise in domestic or geopolitical instability that posed a significant and continued threat to the oil sector could also weigh on the ratings.

We could raise the ratings if Saudi Arabia's economic growth prospects improve significantly or the government's net asset position reverses its ongoing decline. This could follow sustained stronger-than-expected GDP growth or fiscal performance.

Table 43

Saudi Arabia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 20.8 20.3 21.5 23.5 23.2 21.0 24.1 24.6 24.4 24.8
GDP growth 4.1 1.7 (0.7) 2.4 0.3 (4.1) 2.0 2.7 2.2 2.2
GDP per capita growth 1.6 1.0 (1.8) (1.6) (2.0) (1.7) 0.5 0.7 0.2 0.2
Current account balance/GDP (8.7) (3.7) 1.5 9.2 4.8 (2.3) 4.8 5.1 2.8 2.4
Gross external financing needs/CAR&FXR 34.6 34.3 37.4 38.2 41.6 42.8 45.7 46.0 46.7 47.6
Narrow net external debt/CAR (309.5) (268.0) (204.0) (146.6) (150.6) (208.6) (148.9) (143.5) (144.1) (136.7)
GG balance/GDP (7.6) (15.9) (6.6) (3.5) (2.6) (13.9) (2.0) (2.5) (4.5) (4.8)
GG net debt/GDP (121.8) (95.1) (82.1) (66.8) (70.2) (72.0) (59.2) (53.9) (48.2) (41.2)
CPI inflation 1.2 2.1 (0.8) 2.5 (2.1) 3.5 2.5 2.3 2.1 2.1
Bank credit to resident private sector/GDP 58.0 60.9 56.5 50.8 54.1 70.1 66.7 70.8 74.9 75.9
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Senegal (B+/Stable/B)

Rating score 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 stable outlook on Senegal indicates that we expect the adverse economic and budgetary impact of the COVID-19 pandemic to be contained without the country's credit metrics suffering long-lasting damage, also reflecting substantial external financial support. Once the impact of the pandemic abates, we project high economic growth will resume, alongside structural economic and budgetary reforms.

We could raise the ratings if, following the pandemic, the net government borrowing requirement declines significantly; the cost of servicing debt reduces; and economic growth resumes and is sufficient to put public debt relative to GDP on a downward path.

We could lower the ratings if the government's budgetary performance deteriorates more than we expect and real GDP growth is significantly weaker than our forecasts. This could occur if the impact of the pandemic is more protracted than we currently anticipate.

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, placing considerable strain on Senegal's fiscal performance.

(research update last published June 6, 2020)

Table 44

Senegal
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 1.2 1.3 1.4 1.5 1.5 1.5 1.6 1.7 1.9 2.0
GDP growth 6.4 6.4 7.4 6.4 5.3 1.5 4.0 6.5 11.0 9.0
GDP per capita growth 3.4 3.4 4.4 3.4 2.4 (1.2) 1.2 3.7 8.0 6.1
Current account balance/GDP (5.3) (4.2) (7.3) (9.5) (8.1) (9.4) (9.3) (8.7) (4.5) (2.0)
Gross external financing needs/CAR&FXR 122.4 120.3 133.7 137.7 130.5 126.3 126.4 122.3 110.9 97.6
Narrow net external debt/CAR 113.4 106.6 123.4 122.0 122.7 131.4 126.7 120.7 98.7 76.1
GG balance/GDP (3.7) (3.3) (3.0) (3.7) (3.9) (6.3) (5.4) (3.5) (3.0) (3.0)
GG net debt/GDP 38.9 43.0 44.0 51.4 52.9 58.4 61.2 60.5 56.9 54.6
CPI inflation 0.1 0.8 1.3 0.5 1.8 2.6 2.0 1.5 1.5 1.5
Bank credit to resident private sector/GDP 31.7 32.5 34.5 33.0 33.2 32.6 33.0 32.0 29.8 28.2
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Serbia (BB+/Stable/B)

Rating score 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: Stable

The stable outlook balances lingering risks from the COVID-19 pandemic to Serbia's fiscal performance over the next 12 months against the potential for the country's external position to strengthen, particularly if foreign direct investment (FDI) inflows remain resilient while the global recovery strengthens.

We could upgrade Serbia if, alongside fiscal consolidation, Serbia's balance of payments performance proved stronger than we project. This could be the case if strong FDI inflows underpinned a further expansion of export-oriented productive capacity, reducing current account deficits and strengthening central bank international reserves.

Downward pressure could build on the ratings if, contrary to our expectation, government finances weakened significantly or Serbia relied increasingly on debt to finance its external deficits as opposed to the current FDI-based funding structure.

(research update last published May 1, 2020)

Table 45

Serbia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 5.6 5.8 6.3 7.3 7.4 7.7 8.8 9.2 9.6 9.9
GDP growth 1.8 3.3 2.1 4.5 4.3 (1.0) 5.0 3.5 3.0 3.0
GDP per capita growth 2.3 3.9 2.7 5.1 4.8 (0.5) 5.5 4.0 3.5 3.5
Current account balance/GDP (3.5) (2.9) (5.2) (4.8) (6.9) (4.3) (5.1) (5.4) (5.3) (5.3)
Gross external financing needs/CAR&FXR 100.6 98.0 103.5 103.9 107.7 99.7 100.5 99.6 98.5 97.5
Narrow net external debt/CAR 70.6 63.4 59.9 46.6 44.3 48.9 43.4 42.1 40.9 39.5
GG balance/GDP (3.5) (1.2) 1.1 0.6 (0.2) (8.1) (6.9) (5.0) (3.0) (2.0)
GG net debt/GDP 63.9 62.0 52.7 48.4 44.5 49.8 52.6 55.1 55.6 55.0
CPI inflation 1.4 1.1 3.1 2.0 1.9 1.6 2.0 1.5 1.5 1.5
Bank credit to resident private sector/GDP 45.1 44.1 42.8 44.0 44.9 49.4 50.6 51.9 52.9 54.0
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Sharjah (BBB-/Stable/A-3)

Rating score snapshot:
  • Institutional assessment: 4
  • Economic assessment: 3
  • External assessment: 2
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 5
  • Monetary assessment: 5
Outlook: Stable

The stable outlook reflects our expectation that, despite Sharjah's large fiscal deficits, net general government debt will remain below 60% of GDP through 2024.

We could raise our ratings if net general government debt or debt-service costs reduced materially, reversing the current rising trends. However, we view this as unlikely over the next two years.

We could lower the ratings if the government's fiscal position deteriorated further, for instance, if contingent liabilities materialized on the government's balance sheet or if deficits increased beyond our current forecasts, accelerating the buildup of government debt.

Table 46

Sharjah
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 16.5 17.1 22.8 23.2 23.2 21.7 22.5 23.3 23.9 24.5
GDP growth 0.1 3.0 33.5 (1.7) 4.0 (9.8) 4.0 2.5 2.0 2.0
GDP per capita growth (0.9) 2.8 30.9 (2.7) 2.9 (6.0) 1.5 1.5 1.0 1.0
Current account balance/GDP N/A 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 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 N/A
GG balance/GDP (4.2) (3.2) (2.2) (3.2) (4.9) (8.4) (10.2) (6.9) (6.5) (6.0)
GG net debt/GDP 9.7 13.5 12.1 15.6 22.0 33.2 40.9 46.6 51.5 55.6
CPI inflation 3.4 0.8 2.7 4.5 (3.0) (0.3) 2.0 2.0 1.5 1.5
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 N/A
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

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

Rating score 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, against the narrow economic base and constraints emerging from the pandemic.

We would lower the ratings if financial support from the U.K. (unsolicited; AA/Stable/A-1+) diminishes and St. Helena's tax revenues are unable to compensate, or if the U.K.'s external position deteriorates more than we currently expect. We could also lower the ratings if pressure from the pandemic or other severe natural disasters were to have a long-term and sustained impact on St. Helena's economy.

We could raise the ratings if St. Helena's economy accelerated faster than we currently forecast and tax collection rose markedly.

(research update last published April 3, 2020)

Table 47

St Helena
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 13.3 11.2 10.0 10.6 10.5 11.2 11.7 12.5 13.3 14.2
GDP growth 5.1 (7.1) (1.7) (1.2) 1.0 (2.0) 0.5 2.0 3.0 3.0
GDP per capita growth 6.5 (5.0) (5.6) (0.5) 0.2 4.6 (0.3) 1.2 2.2 2.2
Current account balance/GDP N/A 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 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 N/A
GG balance/GDP 1.8 (0.5) (0.7) (1.1) (1.3) 0.9 0.5 0.0 0.0 0.0
GG net debt/GDP (8.1) (7.5) (14.5) (12.7) (11.0) (9.1) (8.9) (8.4) (8.0) (7.5)
CPI inflation 1.9 2.6 5.1 3.8 3.3 1.1 2.0 3.0 3.0 3.0
Bank credit to resident private sector/GDP 29.4 34.9 43.5 46.4 43.6 44.5 44.3 44.2 43.8 43.3
A free and  interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri

South Africa (BB-/Stable/B)

Rating score 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: Stable

The outlook on both the foreign and local currency ratings is stable, since South Africa's credit strengths--particularly a credible central bank, a flexible exchange rate, an actively traded currency, and deep capital markets--should help counterbalance relatively low economic growth and fiscal pressures.

We could lower the ratings if South Africa's economy fails to recover during the forecast period and fiscal financing or external pressures mount. This could, for example, arise from further financing risks emanating from contingent liabilities, including public electricity utility Eskom, or tightening financing conditions increasing the government's interest burden as a proportion of revenue.

We could raise the ratings if economic growth is sustainably higher than we currently expect over multiple years, leading to higher wealth levels and real per capita GDP growth, as well as a significant improvement in the government's debt-to-GDP ratio.

Table 48

South Africa
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 5.8 5.3 6.2 6.4 6.0 5.1 5.8 5.8 5.9 6.0
GDP growth 1.2 0.4 1.4 0.8 0.2 (7.0) 4.2 2.6 1.5 1.5
GDP per capita growth (0.4) (1.2) (0.2) (1.3) (1.6) (8.3) 1.8 0.8 (0.4) (0.3)
Current account balance/GDP (4.6) (2.9) (2.5) (3.6) (3.0) 2.2 1.2 (1.1) (2.1) (2.3)
Gross external financing needs/CAR&FXR 110.9 105.4 104.3 108.9 108.9 95.5 92.9 98.9 101.0 101.5
Narrow net external debt/CAR 8.4 29.6 45.6 45.3 50.3 51.3 42.8 45.5 46.7 48.5
GG balance/GDP (3.7) (3.6) (4.1) (4.0) (5.8) (11.2) (8.9) (7.2) (6.3) (6.0)
GG net debt/GDP 46.5 47.6 49.4 53.2 60.7 73.4 77.5 80.4 83.2 85.5
CPI inflation 4.6 6.3 5.3 4.7 4.1 3.3 4.4 4.5 4.5 4.5
Bank credit to resident private sector/GDP 80.0 77.7 77.1 78.3 79.6 85.2 80.3 78.9 78.4 77.8
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Tajikistan (B-/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 5
Outlook: Stable

The stable outlook reflects our view that the pandemic-related economic pressures and external and fiscal imbalances will be contained in the medium term. We anticipate that external liquidity needs will be supported by disbursements from bi- and multi-lateral development partners.

We could lower the ratings if the strain on Tajikistan's government commercial debt-servicing capacity significantly increased, for example, due to a more severe and prolonged hit to external flows from the pandemic than expected, eroding FX reserves.

We could consider an upgrade if we saw a significant and sustained improvement in Tajikistan's fiscal and external performance, with public debt and external positions substantially strengthened compared with our expectations.

Materially higher GDP per capita and improved effectiveness of monetary policy could also lead us to take a positive rating action. This could happen, for example, as a result of a sustained economic expansion and a significant reduction of financial dollarization, alongside a material strengthening of the banking system.

(research update last published Aug. 21, 2020)

Table 49

Tajikistan
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 0.9 0.8 0.8 0.8 0.9 0.8 0.8 0.8 0.8 0.8
GDP growth 6.2 6.9 7.1 7.3 7.3 4.5 5.0 5.1 5.5 6.0
GDP per capita growth 3.9 4.6 4.9 5.2 4.8 2.1 2.7 2.8 3.2 3.7
Current account balance/GDP (6.1) (4.2) 2.2 (5.0) (2.3) 4.6 1.0 (0.4) (1.0) (1.0)
Gross external financing needs/CAR&FXR 131.6 125.9 101.4 102.6 101.4 93.9 80.6 78.5 78.8 78.4
Narrow net external debt/CAR 88.8 91.2 76.9 85.6 85.8 60.1 53.8 56.5 58.9 58.1
GG balance/GDP (1.9) (8.4) (5.1) (3.3) (1.7) (3.0) (2.8) (2.8) (2.7) (2.7)
GG net debt/GDP 25.4 35.0 39.4 40.3 37.9 41.3 43.4 45.0 45.2 45.2
CPI inflation 5.1 6.1 6.7 5.4 8.0 9.4 8.7 7.8 7.0 7.0
Bank credit to resident private sector/GDP 23.6 18.4 14.2 12.8 12.7 13.4 13.1 12.6 12.0 11.4
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Togo (B/Stable/B)

Rating score 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 reflects our view that the adverse economic and budgetary impact of the COVID-19 pandemic will be contained without lasting and structural damage to the country's credit metrics. Once the pandemic's effect is contained, we expect the authorities to continue with further structural economic and budgetary reforms, leading to improved economic and budgetary performance.

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

We could lower the ratings if the government's budgetary performance deteriorates beyond our expectations and real GDP growth rates are significantly weaker than our forecasts. We could also lower our ratings if we saw pronounced pressure on WAEMU's international reserves and on the West African CFA franc (XOF) to euro exchange rate.

(research update last published Aug. 24, 2020)

Table 50

Togo
2015 2016 2017 2018 2019 2020e 2021f 2022f 2023f 2024f
GDP per capita (in ‘000) 0.8 0.8 0.8 0.9 0.9 0.9 1.0 1.0 1.1 1.1
GDP growth 5.7 5.6 4.4 5.0 5.5 1.8 4.0 5.0 5.0 5.0
GDP per capita growth 3.1 2.9 1.8 2.4 2.9 (0.6) 1.5 2.5 2.5 2.5
Current account balance/GDP (8.2) (7.2) (1.5) (2.6) (2.2) (2.7) (2.0) (1.7) (1.6) (1.5)
Gross external financing needs/CAR&FXR 125.6 135.0 148.9 143.0 147.6 134.5 131.8 127.7 124.7 121.1
Narrow net external debt/CAR 84.8 129.5 113.9 126.0 118.7 141.4 127.4 124.4 120.9 117.4
GG balance/GDP (6.6) (7.1) (0.2) (0.6) 1.6 (6.1) (3.5) (1.0) (0.5) (0.5)
GG net debt/GDP 45.7 49.7 46.1 46.2 37.8 42.5 43.7 41.8 39.7 37.8
CPI inflation 2.6 1.3 (1.0) 0.9 0.7 1.8 1.8 2.0 1.5 1.5
Bank credit to resident private sector/GDP 31.8 32.2 31.6 30.8 30.7 30.5 29.7 28.5 27.6 26.7
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Turkey (B+/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 4
  • External assessment: 6
  • Fiscal assessment – Flexibility and performance: 4
  • Fiscal assessment – Debt burden: 4
  • Monetary assessment: 4
Outlook: Stable

The stable outlook considers the lingering risks from Turkey's accumulated economic imbalances and the fallout from the pandemic over the next 12 months. These are balanced by the resilience of Turkey's private sector and the still-contained stock of net general government debt. We expect the Turkish economy will continue to recover while inflation moderates and current account deficits narrow.

We could lower the ratings if we saw heightened risks of banking system distress, implying potential contingent liabilities for the government. This could be the case, for example, if banks' access to foreign funding diminished or domestic residents converted more of their savings to foreign currency, which is not our base-case scenario. Weakened asset quality following 2020's largescale credit stimulus could also pressure the banking system.

We could consider an upgrade if Turkey's balance of payments position strengthened beyond our current projection, particularly the net central bank foreign exchange reserves. This could happen if Turkey ran lower current account deficits, for example, as a result of stronger recovery in goods exports and tourism services receipts. It could also occur if domestic resident dollarization and elevated imports of non-monetary gold reversed.

We could also raise the ratings if we observed a sustained enhanced public policy predictability and monetary policy effectiveness.

(research update last published Jan. 22, 2021)

Table 51

Turkey
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 11.0 10.9 10.6 9.5 9.2 8.6 8.6 9.0 9.5 10.1
GDP growth 6.1 3.3 7.5 3.0 0.9 1.8 6.1 3.3 3.1 3.1
GDP per capita growth 4.7 1.9 6.2 1.5 (0.5) 1.2 4.7 1.6 1.7 1.9
Current account balance/GDP (3.2) (3.1) (4.8) (2.8) 0.9 (5.1) (3.7) (2.8) (2.3) (2.0)
Gross external financing needs/CAR&FXR 157.2 156.4 149.8 150.8 141.2 167.0 189.3 182.9 175.4 172.8
Narrow net external debt/CAR 118.2 124.0 128.2 114.2 96.3 124.2 113.5 111.2 109.6 108.7
GG balance/GDP (1.0) (1.7) (2.0) (2.8) (3.2) (4.0) (3.5) (3.5) (3.0) (3.0)
GG net debt/GDP 23.4 24.3 23.8 27.0 28.9 34.6 35.7 36.1 36.1 35.8
CPI inflation 7.7 7.8 11.1 16.3 15.2 12.3 15.3 11.3 9.6 9.2
Bank credit to resident private sector/GDP 59.7 62.0 62.9 58.9 56.6 65.8 64.6 65.9 67.5 69.1
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Uganda (B/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 6
  • External assessment: 5
  • Fiscal assessment – Flexibility and performance: 6
  • Fiscal assessment – Debt burden: 6
  • Monetary assessment: 4
Outlook: Stable

The stable outlook balances risks associated with Uganda's high fiscal and external deficits over the next year against our expectation that the country will maintain access to official financing on preferential terms.

We could lower the ratings on Uganda if its access to concessional debt from official creditors is disrupted. The ratings could also come under pressure should Uganda's economic performance deteriorate further, either because of a prolonged impact of COVID-19 or because the expected pick up in foreign direct investment (FDI) doesn't materialize as we currently expect. Both could lead to a higher fiscal and external gap than we currently anticipate.

Although unlikely in the near to medium term, we could raise the ratings if Uganda's economy recovers rapidly on the back of further investment, leading to material improvement in its fiscal and external metrics.

Table 52

Uganda
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 0.7 0.7 0.7 0.8 0.8 0.8 0.9 0.9 0.9 0.9
GDP growth 5.2 4.8 3.1 6.3 6.4 3.0 3.3 4.0 5.0 5.0
GDP per capita growth 1.6 1.0 (0.7) 2.4 2.7 (0.4) (0.0) 0.7 1.7 1.7
Current account balance/GDP (6.6) (4.6) (3.4) (5.4) (7.0) (6.4) (8.8) (8.8) (8.6) (8.4)
Gross external financing needs/CAR&FXR 104.2 104.4 97.6 98.2 108.2 113.2 117.8 121.0 126.8 131.0
Narrow net external debt/CAR 53.8 66.0 64.8 73.5 82.0 105.7 111.6 125.7 139.5 149.7
GG balance/GDP (3.8) (4.0) (3.3) (4.1) (4.9) (7.1) (10.0) (7.0) (6.0) (6.0)
GG net debt/GDP 20.6 24.3 26.0 28.8 29.0 34.5 45.0 49.2 51.7 53.9
CPI inflation 5.4 5.5 5.6 2.6 2.1 2.8 3.0 4.0 5.0 5.0
Bank credit to resident private sector/GDP 12.9 12.6 12.4 12.5 12.8 13.1 13.6 13.7 13.6 13.6
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Ukraine (B/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 5
  • Fiscal assessment – Flexibility and performance: 3
  • Fiscal assessment – Debt burden: 5
  • Monetary assessment: 4
Outlook: Stable

The stable outlook balances the risks to Ukraine's economy from continued delays in accessing concessional financing, the weak external environment, and the potential for a reversal of past reforms, against the country's external buffers.

We could raise the ratings over the next year if we anticipate that public finances would consolidate faster than we currently forecast. This could result from a stronger economic recovery and discretionary policies. The rating could also benefit should Ukraine's external liquidity metrics outperform our projections.

We could lower the ratings if disruptions to funding from concessional programs or capital markets over the next year call into question the government's ability to meet debt service obligations. Such disruptions could happen if the government backtracks on key reforms, such as ensuring the independence of the National Bank of Ukraine (NBU), which acts as both the monetary authority and financial system regulator.

Table 53

Ukraine
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 2.1 2.2 2.6 3.1 3.7 3.7 3.9 4.2 4.5 4.8
GDP growth (9.8) 2.4 2.5 3.4 3.2 (4.0) 4.0 3.5 3.0 3.0
GDP per capita growth (4.5) 2.9 2.9 3.9 3.8 (3.5) 4.8 4.1 3.6 3.6
Current account balance/GDP 5.6 (2.0) (3.1) (4.9) (2.7) 4.0 (1.3) (1.9) (2.4) (3.1)
Gross external financing needs/CAR&FXR 149.9 118.9 115.6 115.0 106.8 93.8 100.3 100.4 101.1 102.3
Narrow net external debt/CAR 152.3 143.1 119.2 103.5 90.8 94.9 89.6 84.6 80.3 78.2
GG balance/GDP (3.2) (2.2) (1.4) (2.1) (2.1) (5.7) (5.3) (3.5) (3.0) (2.5)
GG net debt/GDP 76.1 78.7 69.0 58.8 48.6 58.7 59.3 58.5 57.7 56.5
CPI inflation 48.7 13.9 14.4 11.0 7.9 2.7 7.7 5.5 5.0 5.0
Bank credit to resident private sector/GDP 52.1 42.8 34.6 30.6 24.7 22.7 21.2 20.9 20.8 20.7
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Uzbekistan (BB-/Stable/B)

Rating score snapshot:
  • Institutional assessment: 5
  • Economic assessment: 5
  • External assessment: 3
  • Fiscal assessment – Flexibility and performance: 5
  • Fiscal assessment – Debt burden: 2
  • Monetary assessment: 4
Outlook: Stable

The stable outlook reflects our expectation that fiscal and external debt will continue to increase rapidly but remain at moderate levels over the next 12-24 months. We expect GDP growth to exceed 5% annually as of 2022.

We could lower the ratings if we project a faster or more significant deterioration in Uzbekistan's fiscal and external balance sheets than we currently expect. This could happen if Uzbekistan's economic liberalization and increasing integration with the global economy result in more elevated imports and current account deficits. Absent significant inflows of foreign direct investment (FDI), this could result in a high accumulation of debt-creating flows and external asset drawdowns.

We could also lower the ratings if dollarization levels in the economy significantly increase, or if we observe weakness in key state-owned enterprises (SOEs), leading to the realization of contingent liabilities on the government's balance sheet.

Although unlikely in the next year, we could raise the ratings if Uzbekistan's economic reforms and increased integration with the global economy result in stronger economic growth potential and improving fiscal and external metrics.

Table 54

Uzbekistan
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 2.6 2.6 1.8 1.5 1.7 1.7 1.8 1.9 2.0 2.2
GDP growth 7.5 6.1 4.5 5.5 5.8 1.7 4.8 5.2 5.5 5.5
GDP per capita growth 5.6 4.3 2.8 3.6 3.8 (0.3) 2.8 3.2 3.5 3.5
Current account balance/GDP 1.3 0.4 2.5 (7.1) (5.8) (5.4) (6.4) (5.9) (5.2) (5.2)
Gross external financing needs/CAR&FXR 76.6 82.3 78.0 86.2 86.9 84.9 83.3 87.8 91.0 94.9
Narrow net external debt/CAR (79.7) (89.6) (76.5) (50.6) (22.6) (11.3) 16.0 33.3 45.6 48.9
GG balance/GDP 0.3 (0.5) (1.9) (2.1) (3.9) (4.5) (5.8) (3.5) (3.1) (2.8)
GG net debt/GDP (11.7) (13.4) (18.4) (9.0) 2.6 9.5 14.4 17.6 19.5 21.0
CPI inflation 5.5 5.5 13.8 17.5 14.5 13.0 11.5 10.5 10.0 9.5
Bank credit to resident private sector/GDP 19.2 21.9 36.8 41.4 42.3 48.8 55.5 61.1 64.7 68.4
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.

Zambia (SD/SD)

Rating score 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: None

Ratings at 'SD' do not carry outlooks. These ratings express a condition, default, and not a forward-looking opinion of default probability.

The negative outlook on the long-term local currency sovereign rating indicates that Zambia has built up a high level of supplier arrears, which signals the possibility of nonpayment on domestic commercial financial obligations over the next six to 12 months.

We would lower the local currency ratings within the next 12 months should government fail to pay its local currency commercial financial obligations.

We could raise our ratings out of 'SD' should Zambia and its external commercial creditors agree to a debt restructuring deal.

We could raise the local currency ratings if Zambia improved its fiscal liquidity position or reduced the size of its fiscal deficits and debt burden over the next 12 months. For instance, a marked reduction in its domestic supplier arrears could indicate that its fiscal liquidity position had improved.

Table 55

Zambia
2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f
GDP per capita (in ‘000) 1.3 1.2 1.5 1.5 1.3 1.0 1.0 1.0 1.0 1.0
GDP growth 2.9 3.8 3.5 4.0 1.4 -4 1.4 3.0 3.0 3.0
GDP per capita growth (0.2) 0.7 0.5 1.1 (1.5) (6.7) (1.5) 0.1 0.1 0.1
Current account balance/GDP (2.8) (3.4) (1.7) (1.3) 0.6 11.9 3.6 3.3 3.3 3.3
Gross external financing needs/CAR&FXR 103.4 120.1 116.7 116.2 117.2 102.0 118.7 118.9 117.7 116.9
Narrow net external debt/CAR 90.8 110.5 112.0 105.2 146.3 149.4 169.3 163.7 164.4 164.4
GG balance/GDP (9.9) (6.0) (7.6) (7.4) (8.5) (11.3) (8.0) (6.0) (5.0) (5.0)
GG net debt/GDP 54.3 57.1 58.0 69.0 84.2 119.9 117.6 115.7 114.0 112.4
CPI inflation 10.1 17.9 6.6 7.5 9.2 15.7 12.0 8.0 8.0 8.0
Bank credit to resident private sector/GDP 16.7 12.8 11.4 12.0 12.8 12.2 11.8 11.6 11.6 11.6
Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. f--Forecast. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings.
Primary Credit Analyst:Frank Gill, Madrid + 34 91 788 7213;
frank.gill@spglobal.com
Secondary Contact:Samuel Tilleray, London + 442071768255;
samuel.tilleray@spglobal.com
Additional Contact:EMEA Sovereign and IPF;
SovereignIPF@spglobal.com

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