Slovenia, Greece, Bulgaria most resilient to external shocks in SEE - Scope

November 8 (SeeNews) - The economies of Slovenia, Greece and Bulgaria are the most resilient to external shocks among the countries in Southeast Europe (SEE), Berlin-based agency Scope Ratings said on Monday.

At the other end of the ranking, North Macedonia and Albania are most vulnerable to external risks among the countries in the region, according to Scope's annual external vulnerability and resilience rankings report.

“The performance of Southeast European countries in our latest external risk rankings is mixed. Overall, the region’s relatively poor external-sector resilience weighs on overall performance under 2021’s rankings, notably in cases such as Croatia and Romania. However, there are outliers such as Slovenia that rank strongly overall under a global comparison. Bulgaria has strong scores on one of two axes of the framework – external vulnerability – due to current-account surpluses and limited volatility of the lev,” Levon Kameryan and Dennis Shen, co-authors of the report, told SeeNews.

Bulgaria's and Croatia's risk to external resilience has decreased after their successful entrance to the Exchange Rate Mechanism (ERM) II in 2020, according to the report.

“An important factor supporting Bulgaria and Croatia’s rankings is their respective entrance to the ERM II and anticipated adoption of the euro in the medium run, which would sizeably curtail foreign-exchange risk,” they noted.

Romania's economy is weakened by significant current-account deficits predominantly met via debt-creating inflow, according to the report.

Overall, Switzerland, Malta and Japan lead Scope's 2021 external risks ranking. Lebanon, Zambia and Angola are at the bottom of this year's ranking, which compares the risks to external shocks of 95 countries.

“Many economies are struggling to recover fully from the Covid-19 shock. Rising energy costs and supply-chain bottlenecks are helping rekindle inflation while central banks are looking to withdraw emergency stimulus,” Kameryan and Shen told SeeNews.

Scope’s annual external vulnerability and resilience rankings evaluate economies on underlying vulnerabilities to a potential balance of payment crisis and economies’ degree of underlying resilience when exposed to such external crisis, with an overall ranking that combines vulnerability to and resilience in crisis.

The 2021 external risks rankings of the SEE countries follow: