INSUBCONTINENT EXCLUSIVE:
The landscape of country risk in Latin America has undergone significant changes throughout 2024
Uruguay and Chile continue to lead as the safest investment destinations in the region.Argentina has made remarkable progress, now
surpassing Ecuador in terms of perceived risk
These developments reflect the dynamic nature of economic and political factors influencing investor confidence across Latin America.The
Emerging Markets Bond Index (EMBI), developed by JPMorgan, serves as the primary measure of country risk in the region
This index calculates the spread between emerging market bond yields and U.S
Treasury bond yields.A wider spread indicates higher perceived risk, as investors demand greater compensation for investing in emerging
markets compared to safer options like the United States.Argentina started 2024 with an EMBI of 1,907 points but improved to 1,044 points by
Country Risk: A Comprehensive Overview of 2024
improvement, with its country risk decreasing from 2,005 points at the end of 2023 to 1,207 points by October 15, 2024
scores significantly higher than the global emerging markets average of 313 points
Venezuela continues to hold the unenviable position of having the highest risk in the region.Latin American Country Risk OverviewIts EMBI
closed on October 15 with a country risk of 202 points
has seen an improvement in its country risk
Its EMBI decreased from 340 points at the end of 2023 to 305 points by October 15, 2024.Uruguay leads the region as the safest investment
destination with an EMBI of 92 points
Chile follows closely with 117 points, while Paraguay and Peru also demonstrate low risk with 155 and 158 points, respectively.These
countries present a mixed picture
Guatemala (198 points), the Dominican Republic (194 points), and Costa Rica (210 points) show moderate risk levels.Panama (242 points),
(very low sovereign risk)Chile: 117 points (very low sovereign risk)Paraguay: 155 points (low sovereign risk)Peru: 158 points (low sovereign
risk)Guatemala: 198 points (moderate risk)Brazil: 202 points (moderate risk)Costa Rica: 210 points (moderate risk)Panama: 242 points
(moderate risk)Mexico: 305 points (moderate risk)Colombia: 309 points (moderate risk)Honduras: 398 points (high risk)Argentina: 1,044 points
(high risk)Ecuador: 1,207 points (high risk)Bolivia: 1,801 points (very high risk)Venezuela: 20,700 points (extremely high risk)El Salvador
has made significant strides in reducing its sovereign risk
Once on par with Ecuador and Argentina, it now boasts less than half their risk levels.This improvement allowed El Salvador to successfully
issue international bonds in 2024, marking a notable achievement for the country.The evolving country risk landscape in Latin America
Investors must carefully consider these factors when making decisions in the Latin American market.As the region navigates through economic
