login
Euromoney CountryRisk logo
  • Global Risk Table
  • Countries
  • Analysis
  • About Us
    • About ECR
    • Methodology
    • FAQS
    • Become an Expert
  • Contact Us

Baltics immune to rising risk trend across CEE – ECR Q2 2013 results

Jeremy Weltman Wednesday, July 10, 2013

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.

The CEE region has seen the largest increase in risk of any world region during H1 2013, further narrowing the score differential with the Middle East to just 0.6 of a point. The average score has been affected enormously by events in Cyprus, which caused a 5.8 point score loss and a fall to 60th in the rankings, but not all countries have followed the trend.

The Baltic states, where political stability and fiscal balances are stronger, seem impervious to the risks. Pepping up the region (and the eurozone), Estonia continues to find favour among country-risk experts. With its strong growth – 3% this year, 4% next, according to the European Commission – falling unemployment, virtual fiscal balance and low gross debt burden – at little more than 10% of GDP – it is no surprise that less than a point now separates this mid-placed tier-two Baltic state from 22nd-placed Belgium in the rankings.

The neighbourhood triangulation of the Czech Republic, Slovakia and Poland, with their own strong trade links, have also resisted falls on account of better capital access – though the latter two have seen some deterioration since March.

Other countries, including Hungary (a fall of 2.2 points), Montenegro (down by 1.5), FYR Macedonia (1.4), Bulgaria and Romania (both 1.1), Turkey (0.7) and Slovenia (0.6) have all contributed to the average score decline, even if some countries – with the notable exception of the latter two – have steadied since March (see Core CEE economies become riskier in June).

The unrest in Turkey is a contributory factor, along with the political problems – in Hungary, for instance – though generally speaking risk perceptions are linked to eurozone contagion affecting the banking systems, low growth prospects and capital flow problems, with its implications for fiscal stability.

Stronger growth and a reduction in public debt have stabilized opinions toward Hungary but its score is still lower than in December, notably because of concerns surrounding currency stability and five of the six political factors, highlighting the government’s unorthodox approach to economic policymaking and its weakening of the country’s democracy and institutional independence.

This article was originally published by ECR. To find out more, register for a free trial at Euromoney Country Risk.

Recent articles

  • ECR survey results Q3 2022: Political risk is heightened by conflict, inflation and tightening financial conditions

  • ECR survey results Q2 2022: Covid, war and stagflation risks perplex investors

  • ECR survey results Q4 2021: EMs on back-foot as the year ends

  • ECR survey results Q3 2021: CEE shines but Brazil, Nigeria and other EMs recoil from global investing roadblocks

Euromoney CountryRisk logo

The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our  Terms & Conditions ,  Privacy Policy and Cookies before using this site.


All material is subject to strictly enforced copyright laws. Euromoney Country Risk is part of the Delinian Group Delinian Limited 8 Bouverie Street London EC4Y 8AX Registered in England and Wales, Company number 00954730 Copyright © Delinian Limited and its affiliated companies 2023

  • Methodology
  • FAQs
  • Articles
  • Contact us
  • Modern Slavery Act Transparency Statement