Country Risk Update November 2017

October 2017

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

Our forecast for real GDP global growth for 2017 is 2.9%, the strongest since 2010 and 2011, when the economy rebounded after the contraction brought about by the global financial crisis. However, from a high of 4.2% in 2010, global growth slowed to an average of 2.6% between 2012 and 2016. Looking ahead to 2018, upside and downside economic risks seem to be balanced. Demand in the real sector continues to pick up, while inflation remains benign and employment is picking up. However, low interest rates and low inflation have prompted risk taking in the financial sector, with the result that assets bubbles are now a significant risk.

By contrast, policy uncertainty and security risks across the globe remain elevated. In the US, partisan politics threaten agreement over raising the debt ceiling, while in Asia-Pacific, tensions with North Korean continue to ratchet up. In Latin America, democracy is being undermined in Venezuela, and in Europe, the German election result, forthcoming Italian election and Brexit negotiations dominate the near-term agenda. Meanwhile, insecurity in the Ukraine shows no signs of abating, while security risk is high across the Middle East and North Africa. And yet growth conditions and asset prices have remained insulated from these pressures, buttressed by policy stances that will only be slowly removed in 2018. The question is whether escalation risk around North Korea is priced in.

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

Kenya: Business confidence has been undermined by election-related uncertainties.
Malawi: Plans are made with the IMF for a second extended credit facility.

MIDDLE EAST

Jordan: Growth is at its lowest level since Q1 2011.
United Arab Emirates: Growth in the second-largest emirate, Dubai, slows in Q1.

WESTERN EUROPE

France: Forward-looking indicators continue to improve.
Spain: Political tension is elevated amid Catalonia’s demand for independence.

EASTERN EUROPE

Hungary: Relations with the EU come under further strain.
Romania: The government is trying to rein in the Anti-Corruption Directorate.

ASIA PACIFIC

China: Growth drivers will weaken after the party congress and into 2018.
New Zealand: The hung parliament is likely to result in policy changes.

AMERICAS

Brazil: New corruption charges are laid against the president.
USA: The economy remains on track for 2% growth this year.

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.

Germany

Dun & Bradstreet downgrades its rating outlook for Germany as the election outcome increases the political risk. Report

Saudi Arabia

The King’s crack-down on internal dissent suggests rising political tensions. Report

Trinidad & Tobago

Two new gas finds will help boost energy output. Report

November 2017

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

Global growth for 2017 is set to come in at 2.9%, the highest level since 2011, and will improve further to 3.1% in both 2018 and 2019. Our positive view is supported by the IMF’s October upgrade of its forecasts. Furthermore, the WTO also sharply revised upwards its forecasts for world trade in 2017 on the back of a strong first half performance. More generally, employment data are strong, and commodity prices have rebounded from their 2016 lows. The latter favours the outlook for commodity-exporting countries but also the incentive for inventory-building globally; inventory growth in Q3 in the US was a sizeable boost to the real GDP growth first estimate of 3% (annualised). Markets also appear to have built in fairly stable expectations around the normalisation of central bank policy as quantitative easing is wound down and interest rates rise, as shown by the neutral FX and stock response to the ECB policy announcement in October.

Meanwhile, political risk, although remaining elevated, has eased to a degree since the start of 2017. In particular, the checks and balances of the US political system have ensured more policy certainty than initially predicted following the election of President Trump. Although Brexit negotiations are proving inconclusive at present, businesses continue to operate under existing EU rules, ensuring stability in our short-term forecast period; while the apocalyptic prospect of a US-North Korea nuclear war seems delayed as both consider their how their interests lie in détente, even as President Trump’s visit to Asia in November sees a US military build-up in the region.

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

Cameroon: Large infrastructure projects drive economic growths.
South Africa: The ANC’s December decision on a new leader could determine President Zuma’s fate.

MIDDLE EAST

Iran: US decertification of the nuclear deal raises the spectre of further sanctions.
Syria: The tribes‘ return to political prominence has implications for the business environment.

WESTERN EUROPE

Germany:  Coalition talks are making only slow progress.
United Kingdom: An interest rate rise creates more headwinds for the economy.

EASTERN EUROPE

Belarus: The government would like to open new partnerships with the West.
Bulgaria: The parliament approves a bill to create a single anti-corruption body.

ASIA PACIFIC

China: President Xi’s elevation comes amid serious environmental and governance challenges.
Indonesia: The World Bank recognises the improvements made to the business environment.

AMERICAS

Argentina: Proposed tax reforms are intended to modernise the economy.
Guatemala: Dun & Bradstreet downgrades its rating outlook for Guatemala as a new political crisis unfolds.

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.

Costa Rica

Advances in technology and telecommunications raise Costa Rica’s global competitiveness. Report

United Kingdom

An interest rate rise creates more headwinds for the economy. Report

Vietnam

Economic growth rebounds in Q3. Report

veröffentlicht am: 15. November 2017