In the intricate landscape of global finance, where the credibility of nations is constantly under the microscope, credit ratings emerge as crucial indicators. These ratings, determined by the big three of the financial world – Standard & Poor’s (S&P), Moody’s, and Fitch Ratings – serve as a barometer for a country’s financial stability and its ability to repay debts.
In short, these ratings assess the probability of a nation defaulting on its financial obligations. A higher rating, a symbol of economic strength and stability, often translates into lower borrowing costs for a country. Conversely, a lower rating can be a red flag, leading to increased borrowing costs or, in more severe cases, restricted access to capital.
These rankings are illustrated below by The Hinrich Foundation via visualcapitalist.com, which analyzed the creditworthiness of 28 major economies. The graphic is an amalgamation of indices from the three juggernauts of the rating world (S&P, Moody’s, Fitch).
The data is drawn from the 2023 Sustainable Trade Index (STI), a collaborative effort between the Hinrich Foundation and the IMD World Competitiveness Center.
To produce the STI’s credit rating…
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