Worsening economies in southern Europe have prompted trader credit insurer Coface to upgrade the country risk for the region.

It says the recession is becoming increasingly severe in Spain and Italy and has spread to Cyprus. The insurer has placed the A4 ratings of Spain and Italy under negative watch and downgraded Cyprus from B to C. The highest rating is A1 and there are four A grades, then B, C and D.

The assessments measure the average short-term level of company payment defaults.

Coface has placed its B rating on Indonesia under positive watch, saying exports to China are helping sustain the country’s growth.