rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » 11 countries that can soon go bankrupt

11 countries that can soon go bankrupt

August 26, 2014 19:55 IST

Hundreds of Belizians and international supporters gather on an island to form a message on the Barrier Reef off the coast of Belize City. Photograph: Lou Dematteis/Reuters

While India is still growing, though at a slow pace, many countries have not yet been able to come off the last decade’s financial crisis. Recently Argentina defaulted on payments to its lenders.

Post the default, credit rating agencies have classified the investment grade of the country as ‘poor quality and very high risk’ (technically called as Caa1 rating).

Argentina is not alone. 24/7 Wall St., an online news portal, has come up with a list of 11 more economies that have a risk of defaulting in future based on Moody’s rating of each country.

Let’s take a look at countries that have a high chance of defaulting and even going bankrupt.

Here's a guide to Moody's credit ratings from Wikipedia.

Moody's credit ratings
Investment grade
RatingLong-term ratingsShort-term ratings
Aaa Rated as the highest quality and lowest credit risk. Prime-1
Best ability to repay short-term debt
Aa1 Rated as high quality and very low credit risk.
Aa2
Aa3
A1 Rated as upper-medium grade and low credit risk.
A2 Prime-1/Prime-2
Best ability or high ability to repay short term debt
A3
Baa1 Rated as medium grade, with some speculative elements and moderate credit risk. Prime-2
High ability to repay short term debt
Baa2 Prime-2/Prime-3
High ability or acceptable ability to repay short term debt
Baa3 Prime-3
Acceptable ability to repay short term debt
Speculative grade
RatingLong-term ratingsShort-term ratings
Ba1 Judged to have speculative elements and a significant credit risk. Not Prime
Do not fall within any of the prime categories
Ba2
Ba3
B1 Judged as being speculative and a high credit risk.
B2
B3
Caa1 Rated as poor quality and very high credit risk.
Caa2
Caa3
Ca Judged to be highly speculative and with likelihood of being near or in default, but some possibility of recovering principal and interest.
C Rated as the lowest quality, usually in default and low likelihood of recovering principal or interest.

A woman stands in a queue holding former Ecuador currency, sucres, in Quito. Photograph: Reuters

Ecuador

Moody’s credit rating: Caa1

Moody’s outlook: Stable

2014 Gov’t debt (pct. of GDP): 24.8 per cent

2014 GDP per capita (PPP): $10,492

Men ride their camels as they wait for tourists in front of a part of the Giza pyramid, near Cairo. Photograph: Asmaa Waguih/Reuters

Egypt

Moody’s credit rating: Caa1

Moody’s outlook: Negative

2014 Gov’t debt (pct. of GDP): 91.3 per cent

2014 GDP per capita (PPP): $6,696

 

A man and child eat food that they begged for from a nearby food stall, outside a closed shop in Karachi. Photograph: Akhtar Soomro/Reuters

Pakistan

Moody’s credit rating: Caa1

Moody’s outlook: Stable

2014 Gov’t debt (pct. of GDP): 63.7 per cent

2014 GDP per capita (PPP): $3,231

An anti-government protester throws a tear gas canister back at the police during a protest against the Venezuelan government. Photographs: Christian Veron/Reuters

Venezuela

Moody’s credit rating: Caa1

Moody’s outlook: Negative

2014 Gov’t debt (pct. of GDP): 51.6 per cent

2014 GDP per capita (PPP): $13,531

A woman holds her child as she begs for money in Buenos Aires. Photograph: Marcos Brindicci/Reuters

Argentina

Moody’s credit rating: Caa1

Moody’s outlook: Stable

2014 Gov’t debt (pct. of GDP): 52.9 per cent

2014 GDP per capita (PPP): $18,917

An aerial view of the city of San Pedro. Photograph: Henry Romero/Reuters

Belize

Moody’s credit rating: Caa2

Moody’s outlook: Stable

2014 Gov’t debt (pct. of GDP): 80.4 per cent

2014 GDP per capita (PPP): $8,915

A demonstrator holds a placard as she stands in front of national guards during a protest near Cuba's embassy in Caracas. Photograph: Jorge Silva/Reuters

Cuba

Moody’s credit rating: Caa2

Moody’s outlook: Stable

2014 Gov’t debt (pct. of GDP): N/A

2014 GDP per capita (PPP): N/A

Anti-Troika protesters march through central Nicosia during a demonstration. Photographs Yannis Behrakis/Reuters

Cyprus

Moody’s credit rating: Caa3

Moody’s outlook: Positive

2014 Gov’t debt (pct. of GDP): 121.5 per cent

2014 GDP per capita (PPP): $24,171

Protesters take part in a demonstration against public sector layoffs. Photograph: Yorgos Karahalis/Reuters

Greece

Moody’s credit rating: Caa3

Moody’s outlook: Stable

2014 Gov’t debt (pct. of GDP): 174.7 per cent

2014 GDP per capita (PPP): $24,574

Doctor's Cave Beach Club, Montego Bay, Jamaica. Kind courtesy, Deo/Wikimedia Commons

Jamaica

Moody’s credit rating: Caa3

Moody’s outlook: Positive

2014 Gov’t debt (pct. of GDP): 133.7 per cent

2014 GDP per capita (PPP): $9,256

A person drops money into a container of a begging woman in Kiev. Photograph: Konstantin Chernichkin/Reuters

Ukraine

Moody’s credit rating: Caa3

Moody’s outlook: Negative

2014 Gov’t debt (pct. of GDP): N/A

2014 GDP per capita (PPP): N/A