15
Jul
How does a nation have a credit rating and what authority decides?
Posted by , under Credit
advait0 asked:
Somewhere I read that a nation in Africa was given a higher credit rating as a nation, but I lost the article. How does a nation get a credit rating as a nation, and what authority decides the credit rating for a nation?
Douglas
Somewhere I read that a nation in Africa was given a higher credit rating as a nation, but I lost the article. How does a nation get a credit rating as a nation, and what authority decides the credit rating for a nation?
Douglas
Amy
There is no authority as such, it’s the international credit rating firms that rate nations: Standard and Poor’s, Moody’s and Fitch. In general, these firms analyze the financial figures of the nation (government): the debt, the income, pension systems, tax reforms and status, etc; and based on these they rate the nation. For example, Mexico is now BBB+ and if a pensions reform is passed, it would climb up to A-.
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