To obtain the overall country risk score, Euromoney assigns a weighting to the nine categories listed below. The best underlying value per category achieves the full weighting (25, 10 or 5); the worst scores zero and all other values are calculated relative to these two. The formula used is the following: A - (A / (B-C)) x (D–C), where A = category weighting; B = lowest value* in range; C = highest value* in range, D = individual value.
*NB For debt indicators and debt in default, B and C are reversed in the formula, as the lowest score receives the full weighting and the highest gets zero.
• Political risk (25% weighting): the risk of non-payment or non-servicing of payment for goods or services, loans, trade-related finance and dividends, and the non-repatriation of capital. Risk analysts give each country a score between 10 and zero - the higher, the better. This does not reflect the creditworthiness of individual counterparties.
• Economic performance (25%): based (1) on GNI (Atlas Method) figures per capita and (2) on results of Euromoney poll of economic projections, where each country’s score is obtained from average projections for 2001 and 2002. The sum of these two factors, equally weighted, makes up this column – the higher the result, the better.
*GNI