Country Risk Update August 2016

August 2016

 

Welcome to the latest issue of D&B’s Country Risk Update.

The short-term global outlook is still qualified by the uncertainty created by the British electorate’s vote to leave the EU. Consumer and business surveys in the UK and EU have shown a sharp decline in confidence since the vote, which will transmit into lower spending and investment plans in the short term. Nevertheless, in July, financial market volatility fell from the levels seen in the week immediately after the vote, and even if downgrades to global growth forecasts for 2016 have become the norm, these are not all due to the ‘Brexit’ economic effect.

As expected, the US dollar has strengthened, pushing the possibility of any Fed interest rate rise back to December. Meanwhile, the pound sterling and the euro have weakened in line with the ‘hunt’ for yield as longer and deeper monetary easing is expected, with investors continuing to pull equity funds out of Europe. In terms of commodities, by August oil prices had fallen 20% since the UK’s vote, dragged lower by the strong dollar, resilient shale oil supply and prodigious product inventory buildups; meanwhile gold has strengthened as the zero returns from the precious metal begin to look attractive compared to negative yields on government bond issues. Against this background, we are currently forecasting that global real GDP growth will slow to 2.2% in 2016, from 2.5% in 2015 and 2.7% the previous year; growth in the UK is set to fall to 1.3% in 2016, from 2.3% in 2015.

This complimentary newsletter from D&B’s Country Insight Services group has been put together by their team of experts using the most up-to-date information to provide a snapshot of the latest macro market risk situation, and provides an excellent overview for those exposed to cross-border credit or investment risks.

WORLD SNAPSHOT

AFRICA

Angola: Price pressures escalate rapidly and add to economic instabilityt.
South Africa: Near-term political risk increases as the ruling ANC suffers local election losses.

MIDDLE EAST

Iran: Relations with the US remain fraught, which is hindering cross-border trade and investment.
Oman: The latest financial stability report shows that the financial system remains stable.

WESTERN EUROPE

Germany: The continuing fall in the number of business failures highlights the country’s low level of credit risk.
United Kingdom: The central bank cuts its key policy rate as high-frequency data releases disappoint.

EASTERN EUROPE

Croatia: The government reinforces its border with Serbia due to the migrant crisis.
Russian Federation: The Kremlin takes measures to consolidate power as the risk of civil unrest increases.

ASIA PACIFIC

Australia: Easier monetary policy, structural reform and fiscal stimulus aim to improve overall growth and efficiency.
Indonesia: A tax amnesty is set to boost investment, liquidity and domestic assets.

AMERICAS

Argentina: Small and medium-sized enterprises will get tax relief and investment incentives under a new law.
Costa Rica: Macroeconomic confidence strengthens after a good first half year of firm growth.
]

D&B Country Insight Services

D&B’s Country RiskLine reports above are written by a team of highly skilled analysts in D&B’s Country Insight Services team using exclusive data from its global network of reporting offices as well as primary and secondary data from national and international sources.

These snapshot reports provide a succinct assessment of the risk of doing business in a country, given its economic, political and commercial situation.

Updated monthly, the data and analysis are presented in a standard format  which helps you monitor and evaluate the business trading conditions in a foreign country and facilitates the management of ongoing business risk around the globe.

To find out more information click here.

NEW: D&B Country Insight Snapshots

Designed with the help of our customers these reports build on the key areas assessed by ‚D&B’s Country Insight Model‘ and deliver a perfect balance between mitigating risk exposure and providing insight into new opportunities.

Spain

The economy maintains its momentum despite the UK’s Brexit vote. Report

Taiwan

China’s diplomatic freeze puts the economy under new pressures. Report

Cuba

Government revenue falls due to lower oil and nickel prices. Report

veröffentlicht am: 01. August 2016