In its new video on the YouTube platform, the Kiev-based information and analytical center Experts Club has published a rating of countries with the highest probability of sovereign default. The ranking considered both economic and political factors that could lead states to default.
As Maxim Urakin, the founder of Experts Club, PhD in Economics, noted, the current economic situation in the world is alarming.
“The world economy is facing unprecedented challenges and many countries are on the verge of financial collapse. Under such conditions, it is crucial to understand which states are at the greatest risk of default in order to take appropriate measures,” he emphasized.
State default is a situation when a country cannot fulfill its debt obligations to creditors. According to Maxim Urakin, default can have catastrophic consequences for the country’s economy and its citizens.
“Default is not just a technical event. It is a tragedy for millions of people who may lose their jobs, their savings and even access to basic social benefits. That is why we monitor the economic situation in various countries so closely,” Urakin added.
The Experts Club 2024 ranking of countries with the highest probability of default includes Argentina, Lebanon, Sri Lanka and several other countries already facing serious economic problems. These countries are characterized by high levels of external debt, economic instability and political crises.
Experts Club also identified several countries that are at risk in the medium term. Among them are Argentina and Venezuela, which are already facing economic instability and high levels of debt, as well as Greece and Italy, which are dependent on external creditors.
|
Experts Club Rating |
Country |
Current international rating |
| 1. | Argentina | CCC- |
| 2. | Ghana | in default |
| 3. | Sri Lanka | in default |
| 4. | Lebanon | in default |
| 5. | Zambia | in default |
| 6. | Pakistan | CCC |
| 7. | Mozambique | CCC |
| 8. | Ukraine | CCC |
| 9. | Ethiopia | CCC |
| 10. | Cameroon | CCC+ |
| 11. | Bolivia | CCC+ |
| 12. | Burkina Faso | CCC+ |
| 13. | Suriname | in default |
| 14. | Tunisia | CCC |
| 15. | Egypt | B- |
| 16. | Nigeria | B- |
| 17. | El Salvador | B- |
| 18. | Honduras | B- |
| 19. | Laos | B- |
| 20. | Venezuela | in default |
“We see that countries like Argentina and Venezuela continue to be on the verge of default due to internal economic instability and external pressures. Also of concern is the situation in Greece and Italy, which are highly dependent on international loans. The risk of default remains high in these countries,” commented Urakin.
Special attention this year is paid to Lebanon, which, according to the economist, is “in a state of political and economic crisis, with extremely high debt to GDP.” This makes the country particularly vulnerable to a possible default.
Maxim Urakin also elaborated on the factors that could lead to default. Among them, he emphasized the high level of external debt relative to GDP, economic instability and dependence on external financing.
“Countries with debt-to-GDP ratios above 100% are particularly vulnerable. Lebanon, Cyprus and Greece are examples. Economic instability and political crises in countries such as Argentina, Venezuela and Pakistan also increase the risk of default,” he explained.
Dependence on external financing is another significant factor.
“Countries that depend on external loans to cover budget deficits, such as Spain and Italy, could face difficulties if conditions in international financial markets deteriorate,” Urakin added.
In a commentary on the rating, Maxim Urakin noted that the consequences of a default for a country and its citizens can often be devastating.
“For government agencies, default means restricted access to international financial markets, lower credit rating and the need for painful economic reforms. For citizens, it turns into inflation, devaluation of the national currency, rising unemployment and lower living standards,” the expert explained.
Urakin also emphasized that default may lead to the growth of social discontent and political instability, which may aggravate the situation in the country. He also assured that Experts Club will continue to closely monitor the economic situation in the world and provide timely relevant data to help countries and investors to minimize risks and avoid defaults.
You can learn more about defaults and the presented rating from the video on the YouTube channel of Experts Club:
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