Country Risk Update January 2016

January 2016

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

In mid-December, the US Fed finally raised its target range for the short-term Federal Funds rate to 25-50bp, bringing an effective rate of 0.37%, in the first rise in almost a decade. Earlier in December, the ECB eased its monetary policy slightly, going deeper into negative interest rate territory.Nevertheless, the expansion in the ECB’s ‘QE’ asset purchase programme was modest, reflecting the absence of monetary doves such as France from the ECB governing council vote.

The appreciation of EUR:USD rate will be more modest, accordingly. However, the Fed will have to communicate with great clarity to prevent destabilising uncertainty in 2016: financial markets are pricing in two rate rises in 2016, against the Fed’s forward guidance, which envisages four rate rises.

Three challenges now face economies: higher US interest rates and a strong US dollar; deleveraging and restructuring in China; and the disruptive effect of low oil and metals prices. Countries such as Turkey and Malaysia, with relatively high US denominated-debt are still vulnerable to the first headwind. Not only China’s suppliers in Asia, but also South Africa, Brazil, Russia and Australia will see first- and second-order negative demand shocks persist into 2016, from China’s transition. Finally, among oil exporting countries, those with US dollar pegs such as Saudi Arabia, will be particularly exposed, as they will face simultaneous fiscal and balance of payments challenges.

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

Congo, Dem. Rep. (Zaire): Mine closures stifle output growth despite new projects coming online.
Zambia: Dun & Bradstreet downgrades Zambia’s country risk rating following a downbeat economic assessment by the IMF.

MIDDLE EAST

Kuwait: Kuwait will face a deeper fiscal squeeze after OPEC maintains oil production levels.
Qatar: The riyal weakens in the forwards market, raising concerns over the dollar peg.

WESTERN EUROPE

Italy: Quarterly growth is positive but on a decelerating trend.

EASTERN EUROPE

Azerbaijan: The central bank abandons the currency peg for a floating exchange rate.
Poland: Dun & Bradstreet downgrades Poland’s country risk rating after worrying developments in the legal sphere.

ASIA PACIFIC

Cambodia: Dun & Bradstreet downgrades Cambodia’s rating outlook as political turmoil weakens investor sentiment
India: The Chennai floods highlights deficiencies in disaster response protocols.

AMERICAS

Canada: Growth should pick up in 2016 but the two-speed economy persists.
United States of America: The stable growth outlook prompts the central bank to start raising rates from zero. 

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.

Cote d’Ivoire

Dun & Bradstreet upgrades Cote d’Ivoire’s country risk rating as the economy’s rapid growth looks set to continue. Report

Poland

Dun & Bradstreet downgrades Poland’s country risk rating after worrying developments in the legal sphere. Report

Ecuador

Dun & Bradstreet downgrades Ecuador’s country risk rating following unfavourable constitutional reforms. Report

veröffentlicht am: 18. Januar 2016