country risk: meaning, definition, pronunciation and examples

Sovereign risk is a subset of country risk, specifically focusing on the risk that a national government will default on its obligations or restructure its debt. Country risk is broader, also including risks to private businesses from political instability, exchange controls, expropriation, etc.

Country risk is analysed by credit rating agencies (like Moody's, S&P), international banks, multinational corporations, investment funds, export credit agencies, and political risk consultants.

Yes, to some extent. Political risk insurance (PRI) is offered by entities like national export credit agencies (e.g., UK Export Finance, US EXIM Bank) and private insurers to cover specific perils like expropriation, political violence, and currency inconvertibility arising from country risk.

It is measured through both qualitative (expert analysis of political stability, legal framework) and quantitative methods (economic indicators, credit spreads, CDS prices). Specialised indices, like the OECD Country Risk Classifications or the Euromoney Country Risk score, provide comparative ratings.

The possibility that a country will be unable to honour its financial commitments or that its economic and political environment will negatively impact investments or business operations within its borders.

Country risk is usually formal, business, finance, academic in register.

Country risk: in British English it is pronounced /ˈkʌn.tri ˌrɪsk/, and in American English it is pronounced /ˈkʌn.tri ˌrɪsk/. Tap the audio buttons above to hear it.