BlackRock: Greece is Most Likely to go Bankrupt
According to BlackRock’s quarterly Sovereign Risk Index that shows which countries face the highest risk of default, Greece was among the countries most likely to go bankrupt.
The last three months (April-May-June) favored developed markets such as Belgium and the UK, which rose in the rankings, while key emerging markets fell due to political instability and a worsening economic outlook.
Brazil dropped four places to 31st out of 50 countries, due to increasing levels of short-term debt. Russia dropped three places to 24th, because of “a decline in its perceived government effectiveness” and worsening economic prospects. Argentina, where investors refuse to accept write-downs of sovereign debt, dropped one place to 45th.
Meanwhile, a number of developed economies’ rankings in the index benefited from the International Monetary Fund (IMF) raising growth forecasts. Belgium moved up four places reaching 27th place, UK was placed 20th and the Netherlands moved up two places to 11th.
Greece was ranked 50th, meaning that the country faces the highest risk of bankruptcy.
The index is based on countries’ gross domestic products, tax revenues and qualitative assessments such as the perceived effectiveness and stability of governments.The index was set up in 2011 aiming to provide investors with a more in-depth measure of how risky sovereign debt is.