Country risk facts for kids

Mean Country Risk, March 2000 - March 2011

Country risk is about how safe it is to invest or lend money in a certain country. It looks at things that might change the business environment there. These changes could make it harder for companies to make money or could lower the value of their stuff.

For example, a country might change its rules about money. This could include currency controls (rules about how money moves) or devaluation (when its money becomes worth less). Big events like protests or even a civil war can also make a country risky.

Sometimes, people call this "political risk." But country risk is a bigger idea. It covers all the risks that affect almost every business in or dealing with that country.

Experts who study political risk and credit rating agencies use different ways to figure out how risky countries are. Credit rating agencies often use numbers and financial facts. Political risk experts tend to look more at political situations and use different kinds of information. There isn't one single way everyone agrees on to measure these risks.

How Countries Are Rated for Risk

Companies and groups like Euromoney check how stable countries are. They look at 185 different countries. Their main focus is on how likely a country is to not pay back its debts. They also check if businesses might have trouble getting paid for goods they sell to that country.

Here is a table showing some of the least risky countries for investment in late 2017. A higher score means less risk.

Annual Trend in Euromoney Country Risk, March 2000 - March 2011

Who Rates Countries?

Several well-known agencies help rate how risky countries are for lending or investing. They give "credit ratings" to countries.

• Fitch Ratings (U.S.)
• Moody's (U.S.)
• Standard & Poor's (U.S.)
• CTRISKS (Greater China)

See also

In Spanish: Riesgo país para niños

• Credit rating agency
• National average salary
• Offshoring
• Workforce productivity