How likely are macroeconomic crises in the CIS?

Building on a benchmark sample of 78 middle-income countries and based on generalized linear model (glm) estimations, we assess the risk of Belarus, Kazakhstan, Russia, and Ukraine to experience currency and/or debt crises as other emerging market economies have repeatedly done before. We find that as a result of their current fiscal and monetary situation, these countries face a low but not negligible risk of currency crises. Furthermore, there is also a rather low but not negligible risk of debt crises in all four countries. The risk of twin currency and debt crises is virtually zero in all four countries. In addition to these probability estimations based on the countries’ current situation, our analysis also shows that it is essential for all four countries to avoid worsening economic fundamentals as especially an increase in their debt to GDP ratios would very rapidly increase the risk of debt and/or twin crises to serious levels in all countries.