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COFACE COUNTRY AND SECTOR RISKS HANDBOOK 2023: MAJOR TRENDS OF THE WORLD ECONOMY

Coface launches the 2023 edition of its Country & Sector Risks Handbook in a brand new format but as always with our much anticipated country and sector risk assessments.
Our economic research team offers you their analysis and forecasts for 160 countries and 13 sectors.

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Türkiye: Earthquakes raise inflation risk and political uncertainty

On February 6, the south eastern provinces of Türkiye were hit by earthquakes that killed over 40,000 people in Türkiye and Syria. This toll, far from being definitive, could double according to the United Nations. Millions of people are in need of humanitarian aid and medical personnel work to prevent the spread of diseases in centers that are housing tens of thousands of refugees.

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COFACE STUDY: INSOLVENCIES IN ROMANIA INCREASED BY 7% IN 2022 COMPARED TO 2021

The latest Coface Romania study shows that 6,531 new insolvency proceedings were opened in 2022, up by 7% compared to 2021, and 2% above the level before the Covid-19 pandemic. The losses caused to creditors in 2022 by insolvent companies were 4.6 billion lei, down by 12% compared to the previous year. The number of insolvent companies with a turnover of over EUR 0.5 million increased from 322 to 357 during the past year.

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From excessive pessimism to excessive optimism - Coface Barometer Q4 2022-

The year 2023 starts with good news on the macroeconomic front. First, Europe has avoided a recession that looked long promised. Efficiency gains and the slowdown in activity have led to a sharp drop in energy prices and thus a welcome slowdown in inflation. Finally, the prospect of a rebound in China in the second half of the year, albeit very uncertain, also raises hopes for the global economy. This was enough for the financial markets to go wild, reassured by the fact that the worst-case scenario is for the time being, at bay.

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China reopening has a positive but gradual impact on consumption

China’s reopening process has come faster and earlier than expected. After announcing a gradual easing of its zero-Covid policy in November, the National Health Commission finally decided to downgrade the Covid-19 risk level in late December.

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RECESSION, INFLATION, UKRAINE, CHINA, MONETARY POLICY... 2023 AS SEEN BY JEAN-CHRISTOPHE CAFFET, COFACE CHIEF ECONOMIST

Wansquare asked a panel of economists and business leaders for their forecasts for 2023. Here is what our chief economist Jean-Christophe Caffet had to say.

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COFACE PUBLISHES CEE TOP 500 COMPANIES: How do the biggest companies bounce back from the pandemic?

• 2021 – a favourable environment for Central and Eastern Europe with 5.7% GDP growth after a recession of -3.7% in the first year of pandemic
• Top 500 players: increase in turnover, net profits and employment, due to the recovery from the slump of activity
• Sectors: the reliable backbone oil and gas comes in first in the top 500 followed by automotive & transport and non-specialized trade
• Poland is home to the largest businesses in the region with an increasing aggregated turnover by 26% in 2021 compared to previously

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Coface 2022 political and social fragility indicator

While the sources of economic uncertainty are legion, new political disturbances could be added to their ranks. For several years now, political risk has been a recurring theme in the news, taking various forms: rising populism, social unrest, conflicts, terrorism, and protectionism. The new geopolitical landscape opened up by Russia's actions could reawaken risks in other global hot spots. In addition, price pressures, particularly on basic goods, continue to fuel frustrations, building on those generated by the economic and health crisis triggered by the pandemic.
Coface is today sharing the results of the update of its social and political fragility index. This index has, admittedly, fallen from the record level reached last year, but still suggests a high risk environment. And while the focus naturally shifts to the risks of unrest in emerging countries, the advanced economies are not expected to be spared from this upsurge in social tensions.

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“A COLD CHILL ON THE GLOBAL ECONOMY” Q3 2022 BAROMETER

Beyond the repercussions of the war in Ukraine, the global monetary tightening and the multiple constraints on Chinese growth paint a gloomy outlook. In the short term, the economy seems to be settling into a regime of "stagflation", where almost no growth and rapidly rising prices coexist. The possibility of a global recession, meanwhile, is becoming clearer.

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Coface’s Germany Corporate Payment Survey 2022: Battered companies prepare for another crisis

While the difficult economic situation took its toll, the 6th edition of Coface’s survey on corporate payment experience in Germany indicates that the impact on corporate payments in 2022 appears to be moderate and comparatively lower than the shock on the economy. However, companies are vigilant in the short-term and very pessimistic about the future.

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COFACE STUDY: INSOLVENCIES IN ROMANIA INCREASED BY 16% IN THE FIRST SEMESTER OF 2022 COMPARED TO THE SAME PERIOD OF THE PREVIOUS YEAR

The latest Coface Romania study shows that in the first semester of 2022, 3,510 new insolvency proceedings were opened, up by 16% compared to the previous year, and 6% above the level before the Covid-19 pandemic. Financial losses caused by insolvent companies in the first half of this year reached 2.7 billion lei, up by 36% compared to the similar impact in the same period last year, and almost at the same level as all the losses generated by companies that entered into insolvency in 2020.

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Alina Popa appointed new Country Manager of Coface Romania

Coface Romania has a new Country Manager as of August 1st. Alina Popa takes over the management of the company from Eugen Anicescu who held this position since 2016. The appointment from within the organization reconfirms the solidity of the local team and its potential to strengthen the Coface brand.

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A recession to avoid stagflation? The world economy at a crossroads - Coface Barometer Q2 2022

Four months after the start of hostilities in Ukraine, first lessons can be drawn: the conflict, which is set to last, has already upset the global geo-economic balance. In the short term, the war is exacerbating tensions in a production system that has already been damaged by two years of pandemic and is heightening the risk of a hard landing for the world economy: while the latter seemed to be facing the threat of stagflation a few weeks ago, the change in tone of the central banks, faced with the acceleration of inflation, has resurrected the prospect of a recession, particularly in the advanced economies.

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COFACE ROMANIA CELEBRATES 15 YEARS OF ACTIVITY ON THE COMMERCIAL CREDIT INSURANCE SEGMENT

Coface, a top provider of integrated credit risk management services, marks 15 years since the launch of the commercial credit insurance division on the Romanian market. In this context, the company launches EasyLiner, an insurance product dedicated to SMEs, adapted to the new requirements of the market. Coface thus continues to support companies in their development.

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UI Refactoring with Angular

The community’s accepted opinion about the tech stack sustaining the systems and platforms of the financial and insurance companies is that they are quite old, heavy, deprecated, while the change culture within the companies is often missing or, when the change occurs, has to overcome stubbornness and the comfort’s inertia of the existing people working in the company.

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COFACE AND AL RAJHI TAKAFUL ENTER A STRATEGIC PARTNERSHIP IN CREDIT INSURANCE

This partnership recognizes Coface’s global expertise as a credit insurer as well as its 75 years of experience and its extensive network in 100 countries. It allows Al Rajhi Takaful to strengthen its position on the Saudi market by further enriching its suite of insurance solutions. Saudi companies will have access to new innovative products & services, allowing them to develop their trade efficiently by preventing and managing non-payment risks. The agreement also allows Coface to expand its footprint, providing its global clients with tailor-made solutions for their subsidiaries across Saudi Arabia.

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Medium & long-term knock-on effects of the war in Europe on global sectors trends: will there be resilient sectors?

Even though we see disparities according to companies’ position in the supply chain or geographic location, all 13 sectors studied by Coface will keep on being impacted by the knock-on effects of the war in Ukraine, directly or indirectly, in the medium to long term. Most sectors are expected to be affected by a context of high commodities prices & supply issues exacerbated by the war. This is notably the case for high oil prices that are likely to keep on being fueled by the spillover effect of the ban on Russian oil announced last week by the EU commission; as well as for cereals (Ukraine, Russia & Belarus being large cereal producers). In a context of ongoing disruptions in semiconductors supply, and still spillover effect of the COVID pandemic as shown by the Shanghai port lockdown, the longer the war lasts, the more likely it is that a demand shock will materialize, making the global environment even more adverse.

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COFACE CHINA CORPORATE PAYMENT SURVEY: INCREASING RISKS IN SUPPLY CHAIN DISRUPTIONS AND RISING RAW MATERIAL PRICES

Coface’s 2022 China Corporate Payment Survey shows that fewer firms encountered payment delays in 2021, but those that did report longer periods of overdue payments than in the previous year. The average payment delay rose from 79 days in 2020 to 86 days in 2021. Firms in 9 out of 13 sectors reported an increase in payment delays, led by agri-food, which recorded the largest increase of 43 days, followed by wood, transport, and textile.

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CEE COMPANY INSOLVENCIES ON THE RISE

• Corporate insolvencies in Central & Eastern Europe (CEE) increased in 2021, almost reaching pre-pandemic levels in most countries, after a drop of proceedings in 2020.
• Seven countries experienced a higher number of insolvencies (Bulgaria, Czech Republic, Hungary, Lithuania, Poland, Romania and Slovakia), and five countries recorded a decrease (Croatia, Estonia, Latvia, Serbia and Slovenia).
• Due to COVID support measures being phased out and the consequences of the Russia-Ukraine war, CEE corporate insolvencies are expected to rise in the coming quarters.

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War in Ukraine: Many (big) losers, few (real) winners

More than two months after the start of the war in Ukraine, of Russia’s invasion of Ukraine on 24 February, prospects for a rapid resolution of the war seem increasingly unlikely. As sanctions against Russia continue to pile up, a return to the pre-war situation seems illusory, even in the event of an early end to the conflict.

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