Poverty and Development Division
(PDD)

last updated : 27 April 2000

Economic and Social Survey of Asia and the Pacific, 2000
PART TWO: ECONOMIC AND FINANCIAL MONITORING AND SURVEILLANCE V. REVIEW OF MECHANISMS Go to:
Survey 2000 contents


Table V.4. Standard & Poor's sovereign ratings methodology profile

Political risk
  • Form of government and adaptability of political institutions
  • Extent of popular participation
  • Orderliness of leadership succession
  • Degree of consensus on economic policy objectives
  • Integration in global trade and financial system
  • Internal and external security risks
Income and economic structure
  • Living standards, income, and wealth distribution
  • Market versus non-market economy
  • Resource endowments and degree of diversification
Economic growth prospects
  • Size and composition of savings and investment
  • Rate and pattern of economic growth
Fiscal flexibility
  • General government operating and total budget balances
  • Tax competitiveness and tax?raising flexibility
  • Spending pressures

 Public debt burden
  • General government financial assets
  • Public debt and interest burden
  • Currency composition and structure of public debt
  • Pension liabilities
  • Banking, corporate, other contingent liabilities
Price stability
  • Trends in price inflation
  • Rates of money and credit growth
  • Exchange rate policy
  • Degree of central bank autonomy
Balance of payments flexibility
  • Impact of fiscal and monetary policies on external accounts
  • Structure of the current account
  • Composition of capital flows
External debt and liquidity
  • Size and currency composition of public external debt
  • Importance of banks and other public and private entities as contingent liabilities of the sovereign
  • Maturity structure and debt service burden
  • Level and composition of reserves and other public external assets
  • Debt service track record

Source: Standard & Poor's, "Sovereign credit ratings: a primer", Sovereign Ratings Service (December 1998), p. 2.

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