What is risk country?

What Does risk country Mean

The contiguity, proximity or imminence of a possible damage is called risk . It is about the possibility of harm being done. Country , meanwhile, is a term that can refer to a State, a nation or a region.

The notion of country risk is linked to the payment capacity of a nation state . This index measures the risk that exists in international operations involving a country, understanding the possibility of default as risk .
The entities that grant credits to countries usually analyze country risk: the higher the country risk, the greater the possibility that the country in question will not pay its debts. The indicator , therefore, is very important for the nations themselves since they usually need international credit to promote the development of their economies.

Country risk measures the economic situation of the country, but also takes into account social, political and legal issues. This means that a country whose government faces a stage of instability or that suffers a civil war will have a high country risk, since these circumstances can also affect its ability to pay .
There are agencies that specialize in rating these risks and preparing different ratings. Moody’s , Standard & Poor’s and Fitch are some of the best known and the main references when it comes to studying the solvency of a State .
As a general rule, it is considered that these entities mentioned when establishing results, which they do periodically, usually present ratings both in the short and in the medium or long term.
Among the nations that have been classified as having the highest country risk are, for example and according to a study carried out in 2011 by the Euromoney agency, both Indonesia and Greece, Malaysia, Russia, Ireland, Argentina, Thailand, South Korea, Spain and Portugal.
Due to what has been said regarding the importance of obtaining international financing, the economy of a country - and, therefore, the well-being of its citizens - depends in part on the work of these agencies that measure country risk.
The country risk is so important worldwide that there are many events and appointments that have been held around it. Thus, for example, not only in recent years but also throughout 2016 several meetings will be held in this regard. Specifically, we are referring to those that the COFACE Group, a global credit insurance company, is going to organize in different corners of the world.
Barcelona, ​​Madrid, San Sebastián or Valencia are some of the European cities that will soon host new talks on the aforementioned country risk by that entity. In them, specialists in the field will give their vision on the world situation in this regard, will bring the latest news and analyze economic trends around the planet.

Last January 2016, a conference of this type was held in Paris, which was attended by more than 1,000 people and in which answers were given to questions such as what hope is there with respect to Latin American economies, how prices will evolve of oil or what future awaits the European Community.

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