Iceland and Ireland are on the road to recovery, while Portugal, Italy and Spain plunge further into economic malaise, according to analysts participating in Euromoney’s Country Risk Survey.

The economic situation in Iran is likely to deteriorate further as the west steps up its sanctions against the regime, say analysts at the Institute of International Finance.

Rising real wages and consumption have boosted German growth without a corresponding increase in productivity, generating headwinds for economic growth and corporate profitability for years to come, argue analysts at Natixis, the French investment bank.

ECR experts remain divided over the perceived risks to banking systems in the MENA region, and with only five of MENA’s 18 countries scoring more than 6.0 out of 10 for this particular risk indicator, it is clear it is not just Europe that has substantial solvency and liquidity issues.

Although the Gulf remains the safest bloc within the MENA region, its six constituent countries still display diverse prospects in terms of the three main categories of risk in Euromoney’s survey (see chart).

Country risk continued to increase across the Middle East and North African region during the first half of this year, according to experts taking part in Euromoney’s Country Risk Survey, although the changes in risk scores varied as some countries became safer.

Israel’s score has shown tremendous volatility so far this year, and has slipped four places in the rankings to 33rd, yet overall several of its key indicators have risen.

The wealthier Gulf-based oil and gas producers – underpinned by their strong fiscal and current-account balances – have, in the main, either resisted the plummeting scores seen for Egypt, Tunisia, Libya et al, or still rank comparatively highly for their sovereign safety.

The decision by Fitch to strip France of its AAA rating confirms its fall from sovereign grace but the belated move is unlikely to trigger a rise in borrowing costs.

Declining bank-stability scores across Asia in the second quarter of 2013 highlight rising global macroeconomic risks, as the world’s regional growth engine confronts leverage and financial-imbalance risks, say analysts.

With one or two exceptions, the majority of former Soviet independent states, alongside Russia, have become riskier this year, continuing longer-term trends.

Two-thirds of the region’s 18 countries have seen increased risk since December, not least because of the failure of Cyprus to recover its score decline following the banking crisis.

A broad rebalancing of country risk perceptions has taken place this year, according to the June results of Euromoney’s Country Risk Survey.

Argentina and Venezuela continue long-term score declines; Brazil also slips, but Mexico, Chile, Ecuador and Uruguay lead the improvement to 60% of LatAm’s 20 countries.

China and Japan’s contrasting trends create a more even split of safer and riskier sovereigns across Asia as 12 countries see lower scores, 10 push higher and six are unchanged.

Among the G10, six countries – all EU member states – became riskier during H1 2013, one (Germany) was unchanged and four (Canada, Japan, Switzerland and the US) became safer.

The southern continent’s risk build-up is underlined by falling scores for South Africa and Zimbabwe, but many other African bond issuers have resisted the downturn.

Eurozone slide is maintained with the region’s average score hitting a new low in June, as 10 of the 17 participating member states succumb to further score declines during H1 2013.

Ten of the region’s 18 countries have suffered from score declines since December, led by Egypt and other unstable polities.

Turmoil places onus on whichever administration holds power to rectify economic imbalances.