Risk survey pinpoints variable trends for Central American borrowers

Investors in Central America are facing up to the same threats posing problems for other world regions this year with reduced trade, tourism and investment in a global economy in peril from the coronavirus pandemic.

Euromoney’s risk survey nevertheless shows the region is generally holding firm, with Panama, Costa Rica, Honduras and Nicaragua all improving, which with Guatemala worsening very slightly leaves El Salvador with the biggest deterioration in risk score.

But that only paints half the picture.

Take one of the improvers, Nicaragua. Its higher score has enabled the country to move up from tier 5 (the survey’s highest default category) to tier 4. Yet it remains the region’s riskiest, ranking 134^th on Euromoney’s global rankings – a similar score to other higher risk country investments such as Belarus and Bangladesh.

At the other end of the scale, however, is Panama now at a relatively lofty 47^th, having climbed 28 places since December into tier 3 alongside Peru and Oman. Its gains come from political stability after last year’s elections.