Belarus and Croatia are upgraded – Oman is downgraded

“We have seen many more upgrades than downgrades the last year. This shows that the economic boom is global,” says Stefan Karlsson, Head of EKN’s Risk Advisory Unit.

When it comes to Belarus, higher oil prices and a recovery in the Russian economy have benefited the country. The prognosis for 2017 is a growth rate of approximately 1.7 per cent, which means that the country has come out of a two-year recession. Inflation has gone down from over ten per cent in December 2016 to around five per cent in December 2017, while the currency has stabilised.

“The external debt, the debt service ratio and the proportion of short-term loans in the external debt have declined slightly. The overall payment experience in Belarus for export credit institutions within the OECD also continues to be very good. All these factors combined lead us to upgrade Belarus,” says Martin Ingvarsson, country analyst.

The development has also been positive in Croatia over the last three years. Since 2014, the economy has been growing steadily at around three per cent annually. The government debt and external debt are on a downward curve, while the interest on the government debt remains low, and the debt service ratio is falling. Furthermore, the current account remains strong and the international reserves correspond to seven months of imports.

When it comes to Oman, the country’s dependence on oil and gas exports is great, and the previously lower oil price has resulted in negative long-term effects on the economy.  The deficits in Oman’s budget and current account are greater than in the other Gulf States. Oman’s public and external debt will continue to grow, as the deficits remain large in the coming years.

“At the same time, Oman has a smaller oil fund and less international reserves than its neighbours. Efforts are being made to diversify the economy and reduce the oil dependence, but the effects of these efforts will only be seen in the long term,” says Victor Carstenius, country analyst.

EKN’s country risk classification

EKN monitors developments in countries around the world and assesses the risk of payment problems. The assessment is summarised in a country policy in which we specify the country risk category on a scale of 0 to 7. The lower the figure, the better the country's creditworthiness. Assessments are performed continually, as well as in annual regional reviews made in collaboration with other OECD countries.