For the fourth consecutive year, global growth will fail to exceed 3%. At the beginning of the year however, this target did not appear unattainable, as the highly expansionary monetary policies in place, combined with the fall in the oil price and less restrictive fiscal policies, were expected to effectively accelerate growth. But this was not the case. Who is at fault? Chiefly the emerging markets, with Russia and Brazil in deep recession, and with growth slowing down more rapidly than expected in China, while failing to take off in South Africa or in Turkey.
Many of the commodities exporting countries are also struggling. In this context, emerging currencies have
depreciated sharply against the dollar. One minor consolation: India is the only major emerging economy which is not a disappointment, with a growth rate of over 7% this year and next year.
In this context, Coface is downgrading several country assessments among emerging markets, particularly in Latin America, which will be in recession this year: Brazil, Ecuador, Chile and Trinidad and Tobago. The level of risk has also increased in Malaysia, Tunisia and Armenia. In contrast, outlook for Hungary has been upgraded to positive, as a symbol of central Europe which is benefitting from the timid Eurozone recovery.
This map gives you a global overview of country risk assessments. Coface's methodology in assessing country risk uses macroeconomic expertise, comprehension of the business environment and microeconomic data collected over 70 years of payment experience.
China is trying to find a way to achieve healthier, more sustainable growth, but this is not completely painless for its economy – or for those of its neighbours. According to Coface estimates, growth is unlikely to exceed 6.7% in 2015 and 6.2% in 2016, compared with 13.4% over the period 2006-2007. This is mainly a result of the technological and capital catch-up process running out of steam: several industries are suffering from overcapacity and corporate indebtedness is high, thus impacting investment.
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160 country evaluations, drawn up on the basis of macroeconomic, financial and political data, are made freely available.
Regularly updated, they provide an estimate of the average credit risk on a country’s businesses. This is an invaluable tool, giving an indication of a country’s potential influence on businesses’ financial commitments.
Our evaluations are based on:
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- our contextual business expertise,
- our microeconomic expertise built up over 60 years of payment experience.
Our analyses use a seven-level ranking. In ascending order of risk, these are: A1, A2, A3, A4, B, C and D.
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