Coface's latest sector and country risks assessments

Discover at a glance the business risk profile of each of your international markets. For each country, you have access to our experts' detailed risk assessment and outlook.

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What does country risk stand for?

Coface defines country risk as the average probability of default on an international commercial transaction in a specific country within the next six months. This knowledge enables internationally active companies to better assess the stability of the business environment - and to make better decisions.

How does Coface analyze country risks?

We assess risks for more than 160 countries worldwide. To do this, we use a six-pillar model, with varying weightings. The first pillar is the so-called "business climate", i.e. the institutional environment in a country or the general conditions for doing business (e.g. how insolvency laws are applied). Another important pillar is the "payment experience", for which we use our own Coface data on the payment behavior of companies. The third pillar, "Macroeconomics", focuses on sustainability. This includes economic growth, inflation, exchange rate risks and public debt. The more sustainable and therefore stable an economy is, the higher the rating. The fourth pillar is "political risk", which includes for example the risk of conflict and social and political fragility. Then there is the pillar of "banking risks" (how sustainable are the liquidity buffers and what is the solvency risk) and finally the "environmental risks". Environmental risks include vulnerability to climate change - for example for a country that is heavily dependent on agriculture, so droughts or floods are a big danger. We also assess indicators related to climate change management, as well as transition risks for countries that face regulatory changes to address climate change.

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The Coface scale goes from A to E, where A denotes a very low risk of default and D and E denote a very high probability of default. Regarding E, we specifically advise against conducting any business in these nations since they are either under US sanctions or are engaged in a financially devastating war. In contrast, A is further broken into grades that range from A1 (extremely low risk) to A4 (moderate risk) in order to highlight the disparities among industrialized countries. You can find the latest changes in our Business Risk Dashboard.

What other risk assessments does Coface conduct?

In addition to country risks, each quarter Coface also analyzes sectoral risks for 13 major sectors of the global economy. Each time for the following six regions: Asia-Pacific, Central and Eastern Europe, Latin America, Middle East and Turkey, North America and Western Europe.

here, Coface assessments are based on more than 70 years of expertise. A methodology based on criteria integrated in 3 main pilars : Coface’s expertise and payment experience data, external financial data forecasts (quantiles) other criteria (commodities prices forecast, structural changes, Country risk assessment).