Sace's Economic Studies Office has drawn up the February Country Risk Update. The analysis concerns 12 states and presents two important innovations with reference to the change in outlook. Specifically, it is a worsening of the forecast for Spain and an improvement in the conditions for the Dominican Republic.
Spain is in the L3 risk category with an outlook that turns negative in relation to the deterioration of the public finances and the consequences linked to the new reform of the labor market. This reform is aimed at increasing flexibility which should, in the intentions of the legislators, reduce the unemployment rate which currently stands at 23% globally, with one in two young people out of work.
The outlook for the Dominican Republic moves in the opposite direction for which the risk level is equal to M1 with positive forecasts. The freezing of a 500 million dollar tranche of the Stand-By arrangement with the IMF does not weigh on the forecast. The freezing takes place due to the lack of intervention by the parliament in relation to the adjustment of the market prices of the electricity tariffs which are heavily subsidized by the State.
For a more in-depth analysis, the document is available at the following link.
