Global Investing

Moldova — ultimate crisis-proof country?

January 23, 2009

It’s the poorest country in Europe and its main export is alcohol but it can still beat the world’s largest economy when it comes to financial muscle. Yes you’ve guessed it, Moldova trumps the United States in the Banker magazine’s 2009 World Financial Health Index.

Caution is the watchword of the magazine’s latest index, which is careful not to reward financial risk-taking. According to the Banker’s new model, Moldova, Chile, Bolivia and Peru are less likely to be affected by the global financial storm than the U.S., UK or Japan.

Small is beautiful when it comes to debts and that’s where Moldova wins. Its debt is $763 per capita, compared with the UK’s $171,000. Its banks have only extended loans worth 35 percent of GDP, while in the mighty U.S., the figure’s 230 percent.

Moldova pays 2.8 percent of public sector revenues to service government debt, compared with Italy which spends 11.9 percent on interest payments.

The rule of thumb may be that if your economy has never been fully developed, it has far less potential to crash.

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/