Rubrika: HYDEPARK
At the June meeting of the OECD Consensus, the OECD member countries adjusted the classification of three countries in the so-called Country Risk Ranking. Mongolia improved by one level, while Bangladesh and Senegal were reclassified to one level higher. Although this is only a one-notch move, from an export finance perspective, this decision has real implications for the costs, terms and conditions and overall business strategy of exporters operating or planning to enter these markets. These changes also illustrate a broader context – the volatility of the international economic environment in which emerging markets are changing depending on fiscal stability, political situation or exposure to external shocks. Trading in emerging markets brings the potential for growth, but also an increased level of uncertainty. The risk profile of individual countries is regularly reassessed, which influences exporters’ decision-making when entering foreign markets. And Eximbanka can offer exporters solutions that can mitigate risks and create space for the development of their business relationships, even in more challenging regions.
Mongolia: reforms and stability have brought improvements
The improvement in Mongolia’s classification reflects positive developments in fiscal consolidation, deficit reduction, increased foreign exchange reserves and more effective public debt management. The country, long dependent on the export of raw materials and on its neighbours (China, Russia), is gradually building a more resilient economic framework. The reforms implemented in cooperation with the International Monetary Fund were also positively assessed, as was the progress made in diversifying the economy – in particular in the areas of agriculture, manufacturing and renewable energy. From the perspective of exporters, this change means a lower risk premium, which increases Mongolia’s attractiveness as a destination market. For Eximbanka, it also opens up scope for greater flexibility in evaluating transactions and setting insurance and credit terms.
Bangladesh: Political uncertainty and economic pressure
On the other hand, in the case of Bangladesh, the OECD decided to downgrade the classification due to increasing political uncertainty and macroeconomic risks. The tense pre-election situation in the country and its potential impact on the continuity of reforms are causing a reduction in investor confidence and an increase in lender caution. At the same time, Bangladesh’s economy is hampered by inflationary pressures, currency stagnation and a difficult monetary policy environment. The country’s limited fiscal capacity and the fiscal risks associated with the banking sector or SOEs remain a long-term weakness. Nevertheless, Bangladesh remains a country with development potential, where access to official financing and the continuation of the IMF programme are positive factors. However, exporters need to take into account a higher degree of uncertainty and the need for more robust trade receivables hedging when planning trade with Bangladesh.
Senegal: The debt review has changed the picture
In the case of Senegal, the downgrading was not due to the acute crisis, but to a review of public finances which revealed that the actual level of public debt was well above initial expectations. The hidden liabilities identified led to an increase in debt to 100% of GDP, calling into question the credibility of the country’s fiscal management and leading to the suspension of a forthcoming IMF programme worth USD 1.8 billion. Paradoxically, Senegal also has one of the highest expected GDP growth rates in West Africa, driven by development in the hydrocarbon sector, rising private investment and stable inflation. This means that the country’s risk profile may improve again in the future – but currently requires a more cautious approach.
What does this imply for Slovak exporters?
The changes in classification are the result of an analytical assessment of developments in individual economies, but they also send a clear signal to exporters: market diversification, ongoing risk monitoring and quality hedging of deals are essential. In this respect, Eximbanka offers a portfolio of instruments – from insurance and guarantees to financing export transactions – that enable Slovak companies to enter even more demanding markets with greater certainty. At a time when the global economy is facing multiple challenges, the adaptability and preparedness of the exporter is crucial. Proper risk analysis is not a barrier, but a tool that helps open doors where others hesitate.