Dear friends and colleagues:
The CFR Sovereign Risk Tracker is updated.
Three countries—down from nine a year ago—now carry our highest default-risk rating (10), indicating a 50% or greater probability of sovereign default within the next five years. These countries are Belarus, Lebanon, and Venezuela.
After nearly a decade in default on its external sovereign bonds, Venezuela plans to present a formal debt-restructuring framework in June 2026. The Trump administration’s ouster of Nicolás Maduro in a January military raid led the IMF to resume dealings with Venezuela under the interim government, restoring the country’s eligibility for IMF financing programs.
Argentina illustrates the market effects such support, combined with macroeconomic reforms, can have. Following a $20 billion IMF loan in April 2025, the country attracted additional financing from foreign treasuries, central banks, and private lenders, helping stabilize financial conditions and support a return to economic growth. Its default-risk rating now stands at 7, down from 10 a year ago.
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Sincerely,
