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Risk agency reduces financial strength rating on 13 countries

Credit insurer and ratings agency Coface has imposed negative ratings actions on 13 countries amid an ongoing increase in international trade risk.

Coface rates countries on a 13-point scale measuring the average risk of commercial transactions. Its latest ratings action follows the downgrade of 22 countries in January and a further 47 in April.

The downgrades primarily comprise small and medium economies that are highly dependent on international trade. Countries downgraded in Western Europe were Austria, Finland, the Netherlands and Portugal.

In what is known as “emerging” Europe, Slovakia, Estonia, Lithuania and Latvia faced ratings downgrades while the Central American countries of Costa Rica, El Salvador, Guatemala and Venezuela were all downgraded. Botswana was the only African country to face a negative ratings action.

Coface forecast a 2009 recession of -2.5% and predicts growth to recover in 2010 at around 1.7%.