GCR Ratings (“GCR”) scored South Africa a ‘7’ in its country risk scores, published in its Special Report, in May.
The GCR attributed the score to strong GDP per capita, a well-diversified economy, institutional strength, independence of the central bank and currency stability.
The GCR also said South Africa has become increasingly vulnerable to natural phenomena, such as highly destructive weather patterns.
Government Departments are also reportedly behind targets, in basic service delivery. In addition, debt is projected at between 70% and 85% of GDP to 2026.
GCR said a Country Risk assessment, is a key part of the operating environment score, interacts with GCR ratings in four ways. Firstly, the country risk scores create the foundation for the Anchor Credit Evaluator (the mapping table, see the Criteria for the GCR Ratings Framework and the interactive online map at GCRratings.com/criteria. Secondly, the country risk score/assessment acts as an anchor to the GCR Risk Score and therefore ultimately to the GCR issuer ratings. Thirdly, the country risk assessment acts as a hurdle (or more accurately as a series of hurdles, differing according to industry) that limits uplift away from an entity’s financial sector operating environment (the combination of the country risk score and the financial sector risk score). Lastly, the country risk score provides a level from which government support can be applied for each industry.
Countries topping the list rated at “15” are Australia, Germany, United States, United Kingdom, Spain (10.75), Portugal (10.50), Philippines (8.50), Botswana (7.75), Mauritius (7.75).