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Final Risk Rating



This station will guide you through the application judgement on top of the mechanical risk signals.

Risk Ratings

The prudent application of judgement as a complement to model-based mechanical results, while avoiding excess discretion, is key for the final determination of the country’s risk rating.

Risk Ratings

Low, Moderate, or High Rating

  • A final rating of the risk of external debt distress: low, moderate, or high.
  • A final rating of the overall risk of public debt distress: low, moderate, or high.
  • A full discussion of the main risks to this assessment, including factors such as data coverage, macroeconomic uncertainty, policy implementation risks, and other global factors.

In Debt Distress Rating

Notwithstanding a mechanical signal that accounts for other factors, a country should be rated as In Debt Distress (subject to a few qualifications noted below):

  • For the external rating, when there are ongoing or impending debt restructuring negotiations, or outstanding external arrears on debt.
  • For the overall public debt rating, when there is external debt distress, and/or when there are ongoing or impending domestic debt restructuring negotiations, or outstanding arrears on domestic debt instruments.
  • When the debt sustainability analysis indicates a significant and sustained breach, or a high probability of a future debt distress event. For details on assessing sustainability, please see Station 10.

The following qualifications apply to debt restructuring and arrears:

  • Voluntary market-based debt re-profiling

  • De minimis cases in which arrears are less than 1 percent of GDP
  • Cases in which arrears arise due to technical problems, disputed claims, diplomatic disagreements, difficulties in establishing the appropriate counterparts for payment, or weak debt management
  • Cases in which arrears to official bilateral creditors have been deemed away due to the existence of a debt relief agreement
  • Cases in which arrears were granted to private creditors when debt restructuring with the majority of creditors had been completed, and where the government is judged to be engaging in “good faith” negotiations with the remaining holdouts.

Travel to Station 10 for the next part of your journey



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