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11/19/2018
Economic Publications

All Coface Publications

11/06/2018
Economic Publications

Wind Energy: How long will the wind stay in the industry’s sails?

Wind energy undoubtedly has a bright future, with many countries around the world eager to develop this source of power due to its affordable cost of production, its ease of use, and the abundance of wind. The rise of offshore wind, with an increasing number of turbine projects in the sea, seems to be the beginning of the creation of maritime energy infrastructures that will be able to benefit from the stronger ocean winds. Developing countries, with their restrained means, show a will to empower community with this kind of technology, helped by decreasing costs, access to funding, and the knowledge of advanced economies with a strong track record and more experience.

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10/31/2018
Economic Publications

UAE: A new place in new world trade?

The United Arab Emirates (UAE) has the second largest and the most diversified economy in the Gulf Cooperation Council (GCC). Thanks to authorities’ efforts to diversity exports over the last three decades, the share of the oil sector in GDP and in overall exports declined to 30% and 16% respectively in 2016 (compared with 43% and 76% in 2001). The country has become a regional hub for trade and logistics. This encouragement of new industries has helped the federation to increase its comparative advantage in sectors such as metals, minerals and plastics while also maintaining its competitiveness in oil sector. In order to promote economic integration and widen trade ties, the UAE has signed various agreements with many countries in economic, trade, investment, and technical fields. The strategic location of the country allows it to play a central role in re-exporting goods from different countries around the world towards Arab nations. Re-exports account nearly 60% of total exports.

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10/23/2018
Economic Publications

A New Deal of Cards for Emerging Markets

The past quarter has been marked by a continued rise in oil prices and capital outflows from emerging markets, fueling the depreciation of their currencies (see Graph 2, p. 4). The worsening currency crises in Argentina and Turkey this summer (which led us to downgrade their country assessments in the second quarter of the year) are emblematic cases.

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10/23/2018
Economic Publications

US Trade Protectionism: what are the knock-on effects on global value chains?

While policies to open up trade have been a standard feature since the creation of the World Trade Organization (WTO) in 1995, the 2008-2009 crisis proved a turning point. The crisis boosted protectionism, which then climbed to new levels with the arrival of Donald Trump as President of the United States. Since early 2018, the US government has kept its word on several of its threats in terms of trade protectionism by launching customs duties on imports for various products: solar panels and washing machines (January), as well as steel and aluminium (March, then in June for the EU, Mexico, and Canada, concluding with Turkey in August).

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10/10/2018
Corporate Publications

Central & Eastern Europe Insolvencies:Good times come to an end

A favourable economic environment was not enough to reduce company insolvencies in Central and Eastern Europe (CEE). While average GDP growth accelerated to 4.5%, i.e. the highest level in nine years, insolvencies increased by 6.4%. This latter figure ends the improving trend in business insolvencies, which decreased in both 2015 and 2016. 2017 saw an increase in insolvencies proceedings in nine countries1 and drops in only five2. The regional breakdown indicates a wide variety of dynamics, ranging from a 27.1% decrease in insolvencies in Slovakia, through to a slight increase of 2.4% in Estonia and a surge of 40.1% in Croatia.

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09/26/2018
Economic Publications

Rising Political Risks Cloud Outlook for Asian Economies

Political risks in Asia have increased, according to Coface’s Political Risk Model. Asia currently ranks above the world average in terms of political risk, behind the Middle East and North Africa (MENA), Sub-Saharan Africa and Latin America. Although political risks in Asia have remained broadly stable relative to other parts of the world, some exceptions are notable. These risks could cloud the outlook for some economies going forward. Much of the systemic sources of political risk are related to the continent’s dynamic growth and existing social fragilities. It appears that most of the
increases in recent years have been due to rising political fragilities, associated with a proliferation of less democratic styles of governance.

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08/28/2018
Economic Publications

Businesses in Greece: finally, a fresh start?

With Greece about to pull out of its third bailout package, signs of economic recovery are multiplying: 2017 was a year marked by the return of positive growth (+1.4%), and despite weakening growth in the euro-zone – Greek GDP growth is expected to be close to 2% in 2018, with Greek households and businesses remaining more optimistic in the first half of the year than in 2017. The recent improvement in the economic momentum is far from removing the stigmata of the crisis: from 2008 to 2015, GDP and investment fell respectively by 25% and 60%, the unemployment rate reached 28%, and business turnover collapsed by a third. Wages and property prices halved. Greek banks – despite their recapitalization in 2015 – are still recording high rates of non-performing loans. The International Monetary Fund (IMF) and the European Commission estimate that it will take 10 years before the economy returns to its pre-crisis level. However, reforms undertaken since 2008 have led to a consolidation of the public accounts, which have posted primary surpluses since 2016.

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07/04/2018
Economic Publications

Asia Payment Survey 2018: Regional giants grapple with rising credit risks

Coface’s 2018 Asia Payment Survey covers nine economies. Data collection took place during the fourth quarter of 2017, and valid responses were collected from almost 3,000 companies. Respondents in Asia were under pressure to further extend their payment terms. Average payment terms increased to 64 days in 2017, up from 59 days in 2016. This is in line with the trend observed in Asia since 2015. Payment delays also increased in 2017, according to our survey. The proportion of respondents who experienced payment delays exceeding 120 days increased to 16.5% in 2017, from 12.5% in 2016. Payment delays were longest in China and India; shortest in Malaysia, Taiwan, and Japan. Divergences were also apparent among sectors: the energy and construction sectors featured the highest proportion of respondents reporting payment delays of 90 days or above.

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07/02/2018
Economic Publications

Race for market share in Africa: the European pack is catching up with the French breakaway

In December 2013, the New Economic Partner ship Forum was held in Paris with the aim of reviving trade between France and Africa. At the end of this Forum, then-President François Hollande announced the ambitious goal of doubling trade between France and Africa over five years. A few months later, the drop in oil prices extinguished all hope of achieving this objective and reduced the total value of trade (sum of imports and exports) between these two zones from 73 billion US dollars in 2013 to 54 billion USD last year. In 2017, France also lost its status of leading European supplier to Africa to Germany. This observation symbolizes the continued erosion of French companies’ market share in Africa: exports accounted for almost 11% of flows to Africa at the beginning of the millennium, but halved by 2017 (5.5%).

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06/26/2018
Economic Publications

Barometer country and sector risks barometer Q2 2018

Rising sovereign spreads in the eurozone, increased protectionism, higher oil prices, capital outflows from major emerging countries: warning signals multiplied in the second quarter of 2018. Many of these provoke a feeling of déjà vu, evoking the 2012-13 period. At that time, the International Monetary Fund1 (IMF) stressed that the crisis in the euro area was still relevant, and that rising geopolitical tensions and their consequences on oil prices
were among the main risks weighing on global growth. And, although the IMF reminded us that optimism was in order with regard to the American economy, the risks of falling back into recession (“double-dip”) after the brief 2010-
2011 lull made headlines in many countries throughout 2012. World trade was struggling to recover, in part because of continued protectionist measures from 2009 onwards.

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06/05/2018
Economic Publications

Taking stock of global metal sector trends and outlook

The most-widely traded base and ferrous metals have benefited from a bull market since mid- 2016. Prices have increased on the back of robust global economic growth and technological shifts that have triggered a surge in metal use. Such an uptick in demand has not been observed since the period following the 2008-2010 economic and financial crisis. The use of these metals has been buoyed by highly synchronized growth recovery in the major economies, and has helped the mining and smelting sectors to recover after the end of the commodity super-cycle in the late 2000's.

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06/05/2018
Economic Publications

Turkey Payment Survey 2018: Payment terms expand amid positive economic expectations

This is the first corporate payment survey in Turkey aiming at indicating how payment terms stand in different sectors, how companies manage credit management practices and evaluate future payment experiences. The data collection was conducted in January and February 2018 through phone calls with 2615 companies in 81 cities. While 73% of respondents said they sold with credit terms to their clients, 35.3% of them mentioned they do not have a department responsible for credit management. Only 0.1% said they have a department in charge of trade receivables management.

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06/05/2018
Economic Publications

Political Risk in Latin America: Back to the future?

Latin America has experienced a difficult period since 2014. The slump in commodity prices has impacted activity via several channels (such as lower investments, export revenues, and a tighter public budget). After two years of recession, the region’s GDP growth finally rebounded in 2017 by an
estimated 1.1% year-on-year, and is expected to gain further traction in 2018 (growth forecast: +2.4% YOY). However, this optimistic outlook is linked to favorable global trends than domestic merits. Although a still-gradual tightening monetary cycle in advanced economies (especially in the United States), as well as a soft deceleration in China and the resulting improvement in commodity prices, has aided Latin America, the poor political environment has stained the region’s image in the eyes of much-needed foreign investors – particularly with the multiple political and governmental corruption scandals since 2014.

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05/16/2018
Economic Publications

Western Balkans and the European Union: Political Ties Lagging Behind Economic Ones

Despite regional conflicts, the 2007-08 financial crisis, and the 2009-11 eurozone crisis, Western Balkans countries have developed a close economic proximity with the European Union via a number of regional and bilateral agreements. However, due to institutional, economic, and diplomatic obstacles, accession to the EU will be a long process. At the same time, due to the region’s strategic importance and with the reinforcement of membership conditions, accession (or a pre-accession status) is likely to happen – especially as membership would divert the region from other interested parties (Russia, China).

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04/26/2018
Economic Publications

Currency Risk in Africa: Easing in 2018, but reserves have melted

The exchange rate risk is still relevant on the African continent, as evidenced by the depreciation of the Angolan kwanza by more than 30% since the partial liberalization of the exchange rate regime in January 2018. The shock of falling commodity prices, particularly oil prices from summer 2014
onwards, destabilized many African countries. In the wake of the poor performance of its main economies (Nigeria, South Africa, Angola), the region’s growth slowed to its lowest level for 20 years in 2016. In addition to the slowdown in activity, commodity price developments have resulted in
deteriorating terms of trade1 and downward pressure on most African currencies.

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04/11/2018
Economic Publications

Country and Sector Risks Barometer - Q1 2018 - Beyond the peak of global growth

Positive economic signs continued to accumulate in 2018 during the first quarter. There was sustained growth in investment and a situation of almost full employment in more and more countries, which encouraged households to consume more. Companies are taking full advantage of this virtuous circle and the number of insolvencies in the Eurozone and the United States is expected to fall again this year, by 7% and 5% respectively. According to Coface’s forecasts, Portugal will be the best “pupil” in the monetary union and the country has been reclassified from A3 to A2.

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04/05/2018
Economic Publications

The singularity of political risk in Central and Eastern Europe

With the ongoing wave of elections in the Central and Eastern Europe region, CEE countries are experiencing a key period of change in a context of political risk and economic acceleration, which currently seem to be the two crucial issues attributed to the region. The region’s average GDP growth rate soared to 4.5% in 2017, i.e. the highest level since 2010. However, local politics and national judiciary system changes are creating problems for the region. Worsening relations with the European Union (EU) and a threat of sanctions for Poland have raised additional concerns.

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04/05/2018
Corporate Publications

China Corporate Payment Survey 2018: Payment delays increase despite rapid and robust growth

The Chinese economy staged a comeback in 2017. GDP ticked up from 6.7% in 2016 to 6.9% in 2017, favoured by strong demand, as well as loose monetary and fiscal policy settings. As a result, risk managers have become more complacent, both in terms of their economic expectations and their risk management procedures.

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03/20/2018
Corporate Publications

Poland Payment Survey 2018: Payment delays mounting amid robust economic growth

The second edition of Coface’s survey on payment experiences in Poland was carried out in December 2017. The year saw a peak period of economic recovery, with GDP growth accelerating to 4.6% in 2017 – the highest level of economic expansion since 2011. This has created favourable conditions for businesses. The payment survey investigated businesses’ payment behaviour, which mirrors both the short-term economic situation and the more structural business environment. Businesses in Poland will likely continue to enjoy a favourable macroeconomic environment.

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03/20/2018
Economic Publications

Companies in France:fewer business insolvencies, but still just as many “zombies”

The number of corporate insolvencies in France has continued to decline at the beginning of 2018: -8.3% year-on-year to end of January. This good performance takes place against the backdrop of stronger growth in 2017 (to 2%).

While all sectors benefited from buoyant activity and recorded a decline in business insolvencies, the construction sector performed best, contributing to half of the total decrease recorded. Other sectors – such as services for private individuals, automotive, and clothing – continue to benefit from firm household consumption at the start of this year, driven in particular by the fall in the unemployment rate (8.6% in the fourth quarter of 2017, after 9.3% in the third), a low interest rate environment, and high levels of confidence.

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