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LONDON (Standard & Poor's) Jan. 18, 2007--The top economic growth and fiscal
performances in 2007 are likely to be from countries outside the ranks of the
most developed Western nations, according to a new set of sovereign risk
forecasts from Standard & Poor's Ratings Services.
The U.S. is set to drop out of the 10 rated countries with the highest
GDP per capita in 2007. Russia will continue its star performance of recent
years, becoming one of the 10 largest economies (as measured by GDP), moving
up from 18 as recently as 2000.
Standard & Poor's forecasts are included in a series of reports published
today on economic and fiscal trends among the 113 sovereigns that it rates in
Europe, the Middle East, Africa, the Americas, and the Asia-Pacific region.
The implications of these indicators for sovereign credit risk this year are
summarized in a global report titled "Sovereign Risk Indicators: 2007
Outliers."
"The fastest-growing economies will be those of small countries with new
energy projects coming on stream, many of the new members of the EU, and China
once again," said David T. Beers, Standard & Poor's head of global sovereign
ratings. "Oil and other commodity-producing nations that have strong fiscal
rules in place will post the highest fiscal surpluses, while among the
governments that posted weak budgetary performances in 2006, we expect budget
deficits to narrow in Hungary, Vietnam, Egypt, India, and Japan this year."
The expected weakness of the U.S. dollar means that those countries with
currencies not tied to the dollar may see their wealth, as measured by GDP per
capita, rise in dollar terms. This trend, combined with slower economic growth
in the U.S., is likely to push the world's largest economy out of the top 10
in terms of nominal per capita GDP for the first time, with Sweden taking its
place.
In terms of government debt or asset levels in either the fiscal or
external accounts, the top of the rankings will remain relatively stable in
2007, dominated by major commodity exporters (especially the Gulf states and
Norway), small and wealthy financial centers (Luxembourg, Liechtenstein, and
the Isle of Man), and fiscally parsimonious Singapore.
"Most rated sovereigns reduced their reliance on external funding so far
this decade," Mr. Beers added. "They did so either by improving their
saving-to-investment balance or by debt relief."
Several of Standard & Poor's rated governments in sub-Saharan Africa
improved their debt profile by participating in the Heavily Indebted Poor
Countries initiative, thus obtaining debt forgiveness from official creditors.
Conversely, despite their efforts to obtain debt relief from private creditors
in the past decade, we nevertheless expect Argentina, Belize, Pakistan, and
Uruguay to remain highly indebted to foreigners in 2007, measured either by
government debt as a percentage of GDP, or by total debt as a percentage of
their current account receipts.
Standard & Poor's Sovereign Risk Indicators are a compilation of key
economic and financial variables that its analysts use as part of the process
for reviewing sovereign credit ratings. The data are compiled for each of the
113 sovereigns rated by Standard & Poor's and allow users to readily compare
key indicators within and across rating categories. The report is updated
twice each year and is available to subscribers of RatingsDirect, Standard &
Poor's Web-based credit analysis system, at www.ratingsdirect.com. Ratings
information can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Alternatively, call one of the following Standard &
Poor's numbers: Client Support Europe (44) 20-7176-7176; London Press Office
Hotline (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49)
69-33-999-225; Stockholm (46) 8-440-5916; or Moscow (7) 095-783-4017. Members
of the media may also contact the European Press Office via e-mail on:
media_europe@standardandpoors.com. The Standard & Poor's Global and European
Sovereign press conference can be viewed on www.standardandpoors.com from
Friday Jan. 19, 2007. All related articles are also available on
www.standardandpoors.com.
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