annals of the university of petroÅani â¼ economics â¼ vol. xi - part i ...

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250 Slusariuc, G.C.; Răscolean, I.; Guţă, A.J. SP = 6 ∑ j= 1 PFPj = 64 po int s 1. Actual state of government: ==> PFP1 = 5 points The centre-right party that win the elections in July 2009 continued to govern by itself without a parliamentary majority, based on the help of another centre-right party and other right formations. Despite significant efforts of the authorities, decisive improvements are still to be seen in reformation of law system, the fight against corruption and community funds management. 2. Economical policy of the government ==> PFP2 = 7 point. Economical policy of the government has a reasonable coherence, the set of anti-crisis measures established after negotiations with social environment having positive results. 3. Internal tensions: ==> PFP3 = 12 points There were given 2 point for each category. 4. International position ==> PFP4 = 10 points Generally, the international relations of Bulgaria are good. 5. Debt restructuring ==> PFP5 = 15 points 6. Experience of bilateral relations==> PFP6 = 15 points Finally applying the formula for the total score: SE × SP 52 × 64 SF = = ≈ 33 po int s 100 100 In table 2 are presented the scores of economic and political factors for Romania and Bulgaria calculated with EximBank method. With a final score of 21 points, Romania would be situated in 2010 in risk class C (18-26 points). This corresponds to a situation where foreseeable major payment difficulties are, and in case this would happen, there would be big losses with severe influences upon economy and social-political environment. With 33 points, Bulgaria would have been situated in risk class BC (26-35 points) in 2010. This corresponds to a situation where foreseeable moderate payment difficulties are, and in case this would happen, there would be significant losses. Comparing these three states by GDP per capita at nominal values, according to studies made by IMF in 2010 for the entire world, these states would be in this order: Romania – position 70 (with 7542 $/inhabitant) and Bulgaria on 74th place (with 6334$/inhabitant). At the first inspection it seemed that Romania has an advantage over Bulgaria. But this indicator does not take into consideration the level of the prices in these countries. So a thorough comparison is the one based on GDP per capita as purchasing power parity because this take account of prices in these countries. According to this comparison the standings would be like this:, Bulgaria on 65th place (12851 Intl. $) and Romania on 69th place (11860 Intl. $). While Romania kept their position, Bulgaria’s position in this case is improved overtaking Romania.
Sovereign Risk Assessment under Economic Crisis Conditions 251 Table 2. Quantification and risk evaluation for Romania and Bulgaria Indicators Romania Bulgaria The score for economic factors 42 points 52 points The level of development of the country 8 points 8 points Annual GDP growth 0 points 2 points Balance of payments situation 4 points 8 points Inflation rate 4 points 5 points Export dependency 9 points 9 points Coverage degree of imports by exports 2 points 2 points Import reserve situation in months 12 points 9 points Proportion between short term debt and total external 3 points 0 points debt External payments situation 0 points 7 points Political factors score 50 points 64 points Actual state of government 5 points 5 points Government economic policy 1 points 7 points Internal tenseness 9 points 12 points International position 5 points 10 points Debt restructuration 15 points 15 points Bilateral relations experience 15 points 15 points Final score 21 points 33 points Out of the three countries, Romania is the only one that recorded a negative economic growth of -1.3%, Bulgaria recording a real growth of 0.2%. Also in this position of balance of payments, Romania is the last out of the two countries, the balance of payments representing -4.8% of GDP, followed by Bulgaria with approximately -0.01%, of GDP. Romania and Bulgaria records a degree of import coverage by exports very similar, of 86.4% for Romania and 86.6% for Bulgaria, both have a low export dependency. According to inflation rate, over the year 2010 Romania recorded an inflation rate of 7.96% and by Bulgaria with 4.5%. With regard to external debt for Romania and Bulgaria, the biggest external debt is the one of Romania, being situated at approximately 90 billion euro, while Bulgaria’s external debt is 37 billion euro, which means a more than half debt than Romania. Within the external debt, in 2010, the short term debt for Romania had a weight of 20.7%, and 31.3% for Bulgaria. However, in 2010, the service of debt was approximately 38 billion euro in Romania’s case and 7 billion euro for Bulgaria, which related to exports along the year, represents 86.74% respectively 45.4%. Taking into account all these economic indicators that are used within quantification of country risk, result that Bulgaria, a country that a few year ago was under Romania in most of the economical statistics, managed to draw ahead of Romania, due to the measures taken by Bulgarian government but also because of some uninspired measures taken by Romanian government, measures that resulted in relocation of many companies from Romania to Bulgaria. Fitch agency upgraded the rating of Romania for long term foreign currency credits with one level from BB+ to BBB-, bringing us back in the category of
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Annals of the University of Petroş
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Concerns on Labour Power Selection
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4. CONCLUSIONS Forms of Tax Evasion
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Mitigation of the Crisis Effects in
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Guiding Marks Regarding the Reasoni
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The Influence of the Mining Unions
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Integration process in management s
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annals of the university of petroÅani â¼ economics â¼ vol. xi - part i ...