Concept in Definition ABC

The Risk Country is the concept that, at the behest of the economic sphere, refers to that index that measures the risk existing in the international commercial and financial operations of a given nation of the world. The risk is the proximity of damage or dangerIn this specific case, the risk is associated with the possibility that the country in question cannot afford the payments.

High rate, greater risk that the country cannot pay its commitments

International credit institutions, which precisely because of their metier provide loans to various nations, set their sights very especially on this indicator, that the higher it is, it will warn us that the greater the chances that the country in question will not pay its debts, meanwhile, how much The lower it is, it will imply little risk and therefore it will be considered a reliable country to which money can be loaned because it will honor its debt.

The political and social situation also increases the country risk

The international credit that a country can receive from the aforementioned credit institutions can be the rescue they demand to get out of a crippling economic situation, and it can also be that help that is demand to finance economic development, the realization of some works of infrastructure, among other issues. For example, nations that require assistance financial of this type they should know that the first thing to look at to access credit is the blessed country risk.

Now, we must say that although the economic situation is the focus of attention and the highest point to measure country risk, other factors also come into play. factors that affect the rise or fall of this risk, such is the case of serious, critical, unstable social, political or judicial situations. That is, if the government of a nation is going through a situation of instability and crisis as a result of other situations that not only have to do with economics, this will also increase the country risk fabulously.

There are several agencies that take care of its measurement, among the most recognized, the North American one, based in New York, Standard & Poor’s stands out. It is especially dedicated to elaboration and to the periodic publication of the risks in the matter of bonds and actions in the countries of the world.

Photos: iStock - vetkit / Teradat Santivivut