Semaphore of sovereign risk: Argentina, among the 5 countries most likely to experience a crisis

In times of global turbulence, major investors are interested in the least developed markets in the face of the threat of new sovereign debt crises. Given this possibility, UK-based international consulting firm Oxford Economics has adjusted the crisis risk levels of 17 markets considered to be "frontier", including Argentina.

"The increasing issuance of bonds from these countries has made them more vulnerable to global financial crises", supports the work published this week. The report warns that some of The largest increases in public debt were recorded in Argentina, Ghana and Ukraine., with increases of more than 30 points of GDP since 2011.

The work also warns that the rate of accumulation of public debt of these countries has far exceeded that of the major emerging markets. Given this situation, Oxford Economics has developed a "sovereign risk semaphore" from a variety of economic, political and institutional factors.

Evghenia Sleptsova, chief economist of the consulting company, warned that during the last decade, "the risk profile of the 17 major frontier markets has deteriorated"and adds that a lot of that"this is due to a constant accumulation of public debt in the hands of private creditors", which makes these markets more vulnerable.

The badyst also warned that the influence of China worries more and more. "We are worried about the increase of Chinese bonds in these markets"said the chief economist at Oxford Economics.

"These two factors will complicate future debt restructuring efforts, which investors should pay particular attention to in this renewed performance search environment."Sleptsova warned.

Traffic light: what are the most risky markets?

Oxford Economics calculations place Pakistan, Ukraine, Lebanon, Argentina and Ecuador in the top five the list of markets most exposed to a debt crisis, followed by Kenya, Sri Lanka, Bangladesh, Ghana and Oman. The ranking is completed: Egypt, Dominican Republic, Costa Rica, Nigeria, Morocco and Vietnam.

The consultant's report points out that several of these countries are audited by the IMF (with whom adjustment programs have been agreed) both in Ukraine and in Argentina "they still face big twin deficits"to which is added the possibility that the reforms will not be interrupted in view of the next elections, as is the case in our country.

Last February, the consultant determined that Argentina was the most vulnerable tax country in the region, "When an adjustment in a recession can be a toxic combination for a president seeking to be re-elected".