COVID-19, a catalyst for political risks

The annual update of Coface's Political Risk Index, published in the Coface Q3 Barometer, highlights a dual trend: on the one hand, a decrease in the risk of conflict at a global level, but on the other, an increase in the risk of political and social fragility. The latter is exacerbated in the countries most exposed to the coronavirus pandemic.

Similar to last quarter, the uncertainties surrounding the forecasts presented in this barometer are very high. They are primarily linked to the global health situation: since June, the pandemic has continued to gain momentum. While waiting for a vaccine and/or treatment, businesses and households have postponed spending and investment projects, both out of constraint (during periods of lockdown) and as a precaution.

Coface anticipates a global growth rate of -4.8% in 2020, followed by a 4.4% rebound in 2021. GDP in the Eurozone and in the United States would remain 3.5 points and 2 points below the 2019 levels, respectively. At least 3 years would be required to return to pre-crisis levels of production. Similarly, the rebound in world trade will only be partial: +3.5% expected by Coface in 2021 after -13% this year.