Chile was categorically selected as one of the countries with least financial risk worldwide in a recent ranking conducted by CMA Consultants, a company monitoring the global financial market. Filed as #10, between Germany (9) and Australia (11), the ranking signifies that Chile has a significantly low possibility of defaulting during the next five years.
It’s Chile’s best position in 10 years, with the probability of default standing at 4.3% and average Credit Default Swaps (CDS) of 66.2 points for this year’s first trimester. The ranking is based on the analysis of CDS or insurance against bankruptcy.
Alberto Ramos, a Goldman Sachs economist, comments that “Chile’s vulnerability is low and is a very well managed economy and for those reasons, the probability of default is extremely low.” He says that to continue scaling the ladder, Chile should focus on education, innovation, and infrastructure.
Complimenting Mr. Ramos’ sentiment, Luis Arcentales, an economist for Chile from Morgan Stanley, says that Chile’s position is not surprising– “national fiscal accounts have benefitted from nearly a decade of structured financial regulation and everyone knows that Chile has assets in reserve and a very low debt.”
The countries that fell into the lowest rankings were: Greece (64) and Venezuela (63) with Chile’s neighbors holding the 27th (Brazil), 33rd (Peru), and 60th (Argentina) spots.