Country-assessment: Knowing the issues and risks associated with its investments
As a bank, AFD has a duty to weigh the issues and to monitor the risks associated with each of its investments. That’s why it has an Economic Assessment and Public Policy Department in charge of analyzing the economies of the countries where it works.
These country assessments help in understanding the development processes of the States concerned, in identifying their growth trajectory, as well as in detecting the economic, social, political, and financial vulnerabilities associated with them.
They are organized into five major themes:
- the context, which covers the political, socioeconomic, demographic, historical, and geographical dimensions likely to have an impact on economic balances;
- the long-term growth trajectory, which takes into account underlying structural factors and aspects having more to do with the present economic climate;
- the state of public finances and the debt;
- the state of external balances, through an analysis of the external financing needs and how they are covered;
- the strength of the financial and banking sector.
The key issues of climate and energy are not neglected and are intertwined with all the above aspects.
The Economic Assessment and Public Policy Department also produces more crosscutting analyses dealing with macroeconomic issues such as free-trade areas and financial globalization. Along with the country assessments, these studies help to foster dialogue on developing the AFD’s intervention strategies.