Vera Karadjova – Faculty of Tourism and Hospitality – Ohrid, Kej Makedonija 95, Ohrid, North Macedonia

Aleksandar Trajkov – Faculty of Tourism and Hospitality – Ohrid, Kej Makedonija 95, Ohrid, North Macedonia

7th International Scientific-Business Conference – LIMEN 2021 – Leadership, Innovation, Management and Economics: Integrated Politics of Research – CONFERENCE PROCEEDINGS, Online/virtual, December 16, 2021, published by the Association of Economists and Managers of the Balkans, Belgrade; Printed by: SKRIPTA International, Belgrade, ISBN 978-86-80194-54-7, ISSN 2683-6149, DOI:

Assessing country risk;
CEFTA countries;
Macroeconomic policy;
Foreign payments risk;
Financial transfers risk;
Debt service ratio;
Import ratio



Country risk analysis has become extremely important in contem­porary conditions. This paper briefly discusses concepts, definitions, basic components, and some quantitative methods used to address various issues related to country risk in selected CEFTA countries. The paper also presents the indicative calculation of some of the elements and indicators for the selected countries, based on relevant available data, and in order to make a comparative analysis. Having in mind that country risk is a specific and complex macroeconomic risk, its determination and analysis is additionally complicated in terms of contemporary global changes. In fact, that is a risk of a country as a whole, its macroeconomic policy and economic balance or unbalance, political stability or instability of a country, political disturbances and democratic processes, political system and legal system, etc. Therefore, country risk involves several kinds of risks, such as political risk, economic risk, foreign payments risk, financial transfers risk, etc. Globally, all those risks can be divided in three biggest groups: risks of macroeconomic unbalance of the country; risks of the political instability of the country; and risks of the system of the country (system risks). Due to its complexity, the paper will elaborate and quantify some of the basic indicators related to country risk, mostly re­lated to trade exchange between selected countries in the CEFTA agreement. The procedures and methods of country risk analysis and measurement have similarities with those used for individual economic entities, but techniques for the country risk analysis are less developed and there was no generally accepted analysis method. The final assessment may be a combination of many external and internal models that are not mutually exclusive, and in that process can be analyzed a number of different factors that determine country risk. Among the factors that condition the country risk and that are necessary to be included in the analyses can be: country’s foreign-financial position; external debt; debt management; assessment of the natural re­sources; the degree of technique and technology development, industrializa­tion and automation of production, and so on. The paper will stress as most important indicators in assessing country risk: The Debt Service Ratio, Import ratio, Investment Ratio, Domestic Money Supply Growth, etc., which will be calculated using selected macro-economic data such as: GDP, GDP per capi­ta, Real GDP grow, Inflation (CPI), Fiscal balance (% of GDP), Current account balance (% of GDP), Public debt/GDP (%), External debt/Exports of goods & services (%), Debt-service ratio (%), Foreign exchange reserves, Foreign direct investments (% of GDP), Exchange rate etc. The methodology of collecting and processing information and the degree of reliability of collected data greatly depends on the promptness and accuracy of the national institutions that present those data.

The goal of the paper is: to point out the importance of country risk assess­ment, to determine and compute the basic indicators of country risk in some of the Southeastern Europe countries, to determine conditions and trends of country risk in selected countries, and to suggest some strategies for its re­duction in conditions of the unstable environment and crisis disturbances.

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CEFTA Parties (last update 9 January 2022)


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