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2020 risk ratings: Euler Hermes downgrades the risk rating of 18 countries and 126 sectors

  • Euler Hermes announces that 18 country risk ratings have been downgraded in the first quarter in 2020 due to the risk of a prolonged recession and a wave of bankruptcies caused  by the Covid-19 outbreak
  • The world leader in credit insurance also lowered 126 sector ratings across automotive, transportation, electronics, and retail in numerous countries
  • PARIS, 30 MARCH 2020 – Already weakened by numerous factors of uncertainty (Brexit, trade tensions, electoral deadlines), the global economy now faces a new challenge: the Covid-19 pandemic. Not only do we witness a heavy human cost, it is also taking a toll on businesses around the  world, disrupting supply chains and business operations, affecting household and market confidence, and severely limiting international trade.
  • Therefore, according to Euler Hermes, global economic growth in 2020 will register a strong slowdown, reaching only +0.5% (+2.5% in 2019). In parallel, international trade will contract this year at -4.5%. As a result, the risk of non-payments will rise significantly. Euler Hermes expects insolvencies to increase by +14% in 2020. In this weak international landscape, numerous countries and sectors will be hit hard.
Every quarter, Euler Hermes publishes its country and sector risk ratings to measure the development of non-payment risk in trade receivables. We monitor and evaluate a total of 242 countries and 18 sectors every quarter through continuous tracking of 40 short-term and long-term economic and financial indicators. The defaults in Argentina and Lebanon these last few months confirm the necessity of the country risk model in order to  measure the vulnerabilities that a crisis, such as the Covid-19 outbreak, can expose.
In the first quarter of 2020, Euler Hermes lowered the grade of 18 countries: Ecuador, Thailand, Indonesia, lndia, United Arab Emirates, Kuwait, Morocco, Kenya, Ghana, Mauritius, Czech Republic, Poland, Romania, Ireland, Slovakia, and Latvia. This list includes both developed and developing economies. For instance, Brazil is paying dearly in this global economic and health crisis, despite initial hopes that dynamic reforms would accelerate growth. Similarly, Japan, which was already fragile at the start of 2020 following several shocks last autumn, now sees its weaknesses made worse with the Covid-19 pandemic. India is also on the list: The country was already facing numerous structural and cyclical challenges, and these are now being amplified by the current situation.

The visible and potential consequences of the Covid-19 pandemic are integrated into our country risk analysis. We are still paying attention to the situation of other developed countries, notably France, Germany, Spain, and the United States. These countries have the necessary means to protect their businesses but their situation could rapidly become more complicated should their measures of isolation and the freezing of their economies last longer”, warns Ludovic Subran, Chief Economist of Euler Hermes and Allianz.


Euler Hermes has downgraded 126 sector risk ratings across the world. This is a new historic level, never seen before: The previous record was in Q1 2016, which saw a total of 70 sectors risk ratings downgraded. It is important to highlight that in 60% of cases, these changes have led to the sector rating going from “moderate risk” to “high risk”. These two signs prove that the global economy and businesses are going through an unprecedented, extremely complex and uncertain time.  

The automotive sector is the most severely impacted. Euler Hermes has downgraded it in 26 countries. It is followed by the transportation sector (downgraded in 21 countries), electronics (14), and retail (12). Pharmaceuticals and software and information technology are the two most resilient sectors. From a regional perspective, Western Europe suffers the highest number of sector rating downgrades with 52 cases. This region is followed by Asia Pacific (29) and Central and Eastern Europe (24).

Get full access to our country and sector risk reports on our website.