Sri Lanka among 10 emerging countries-Coface

Sri Lanka among 10 emerging countries-Coface

Sri Lanka is among 10 new emerging economies, says French credit rating agency Compagnie Francaise d’Assurance pour le Commerce Exterieur (COFACE), citing the country’s high growth potential, favorable business environment, good production prospects, and sufficient financing to support expansion.

In a report “COFACE Identifies 10 Emerging Countries hot on the heels of the BRICS.” The organization notes that average economic growth by the BRICS nations — Brazil, Russia, India, China, and South Africa — this year would be 3.2% less than the average in the last 10 years.

To identify the promising countries that the BRICS are now giving way to, Coface identified several criteria, including two that are essential: One of them is countries that have high growth which is accelerating, and whose economy is diversified and resilient to growth slowdowns and the other is countries that have sufficient funding capacity to finance growth (a minimum level of savings needed to avoid excessive recourse to foreign savings), without the risk of creating a credit bubble or which do not yet have equity markets of a comparable size of those in OECD countries.

“Among them, a ‘Top 10’ emerges with good production prospects and sufficient financing to support expansion” Report said adding Sri Lanka, Colombia, Indonesia, Peru and the Philippines have a sound business climate (A4 or B), similar to that of the BRIC countries now.

Accordingly the report added that Kenya, Tanzania, Zambia, Bangladesh and Ethiopia have very difficult (C) or extremely difficult (D) business environments which could hamper their growth prospects.

“Naturally, it will be more difficult for the second group of countries, who could take longer to fully realise their growth potential. However, their business environment problems are relative: in 2001, the quality of governance in Brazil, China, India and Russia was comparable to that of Kenya, Tanzania, Zambia, Bangladesh and Ethiopia today,” Head of country risk at Coface Julien Marcilly has said.

But the report points out that Sri Lanka, Colombia, Indonesia, Peru and the Philippines have a strong potential confirmed by a sound business environment.