After five years of sanctions, Iran is finally to rejoin the global community. The
return of Iran should have an effect on international growth via the oil channel but, above all, will bring huge changes to Iran itself. The lifting of sanctions, following the P5+1 agreement, will have a significant effect on raising Iran’s output. This will revive the Iranian economy, particularly through the recovery of foreign trade and investments.
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At the end of 2015, a year marked by a deterioration in the global economic environment, Coface recorded a slight increase in net income (group share), at €126M (€125M in 2014). Turnover for the year grew by 3.4% (+1.2% at constant scope and exchange rate), supported by emerging markets. The Group’s loss ratio net of reinsurance has stabilized over the last six months, at 52.5%. Coface is prepared for Solvency II, which came into force on 1 January 2016. The ratio of capital required to cover subscribed risks stands at 147%7, a level in line with Coface’s risk appetite and dividend pay-out policy of 60% of net income.Read More
The Board of Directors of Coface announces the appointment of Xavier Durand as Chief Executive Officer
The Board of Directors of Coface which met today under the chairmanship of Laurent Mignon has decided to appoint Xavier Durand to the position of Chief Executive Officer. This appointment will become effective following the Board of Directors’ meeting to be held on 9 February to approve the accounts for fiscal year 2015. Jean-Marc Pillu will continue in his role as Chief Executive Officer of Coface until this date.Read More
Aimed at the evolving credit insurance needs of mid-market companies, Coface has modernised its flagship policy, renamed TradeLiner. The move follows on from the experience Coface gained through its first global non-payment protection offer introduced fifteen years ago and is based on its desire to work harder to help protect mid-sized companies operating in the real economyRead More
Although worldwide growth continues to recover,its rate will not exceed 3% for the fourth year in a row. The advanced economies are doing much better: Activity in the USA rose significantly in the 2nd quarter (2.5% forecast for 2015), thanks to both consumer spending and investment, and in the Eurozone (1.5%) the gradual upturn in activity continuesRead More
160 COUNTRIES UNDER THE MAGNIFYING GLASS
- Macroeconomic expertise in assessing country risk
- Comprehension of the Business environment
- Microeconomic data collected over 70 years of payment experience.
China is trying to find a way to achieve healthier, more sustainable growth, but this is not completely painless for its economy – or for those of its neighbours. According to Coface estimates, growth is unlikely to exceed 6.7% in 2015 and 6.2% in 2016, compared with 13.4% over the period 2006-2007. This is mainly a result of the technological and capital catch-up process running out of steam: several industries are suffering from overcapacity and corporate indebtedness is high, thus impacting investment. We are witnessing a shift in the Chinese economic model. Which Asian countries will be the first victims if there is a hard landing? And which will enjoy the greatest immunity?Read More
Company insolvencies in Western Europe have experienced two successive storms. The subprime crisis, which made insolvencies jump by an average of +11% in the twelve countries studied was, unsurprisingly, followed by further shock waves, with increases of +8% in 2012 and +5% in 2013. Today the skies have begun to clear. The average drop of 9% observed in 2014 will continue with -7% in 2015 . While insolvencies continue to increase in Italy and Norway, they are seeing the positive impact of the timid recovery in the eurozone in ten other countries (Germany, Belgium, Denmark, Finland, France, the Netherlands, Portugal, United Kingdom and Sweden).Read More
Many countries are facing the full brunt of the decline in oil prices, especially emerging countries for which Coface has revised growth forecasts to 4% for 2015 (compared to 4.2% in March 2015). Meanwhile, developed economies (2% growth forecast for 2015 and 2016) are benefiting from the slight recovery taking shape in the eurozone (1.5% in 2015).Read More
Although growth was accelerated by the high prices of commodities on which sub-Saharan Africa is highly dependent, the region must now deal with the effects of falling oil prices. The 45 countries screened by Coface are affected to different degrees. Three of these countries have all the ingredients needed for dynamic growth in the short and the long term. They have been relatively spared by the decline in world commodity prices and their economies are diversifying.Read More
In May 2015, the IMF highlighted India as “one of the bright spots in the global economy”, mainly due to more effective policies and the end of political uncertainty. Coface expects the country’s GDP growth to reach 7.5%. But to what extent have Modi’s reforms contributed to the recent pickup in growth? Are the improvements in the economy without risks?Read More
Coface Insolvency Monitor for Central and Eastern Europe: Economic perspectives improved but corporate challenges remain
Companies in Central and Eastern Europe have experienced turbulent times over the last few years. Economies were challenged by the contraction of private consumption, due to rising unemployment and the ongoing deleveraging process. They were also affected by the double dip recession of their main trading partner, the Eurozone. 2014 was a year of improvement for most CEE economies. The average pace of GDP growth increased from 1.3% in 2013, to 2.5% in 2014. The engine of economic growth was fuelled by internal demand. This is especially visible in the case of household consumption, which is benefitting from lower unemployment rates, rising wages and improved consumer confidence. Low inflation, or even deflation, has reached many economies in the region. This has mainly been caused by external factors, such as lower commodity prices. The improved economic perspectives led to a stabilisation in the number of insolvencies, with a modest decrease of -0.5% in 2014 (compared to +7% in 2013).Read More
April 1st 2015 marked the end of milk quotas in Europe, a regulatory tool imposed in 1984 in response to overproduction, leading to the so-called “butter mountain” and the “milk lake”. For the first time in 30 years, the market alone will determine the quantities of milk produced. Are French dairy farmers ready for this? Is the abolition of milk quotas going to make it possible for milk producers to supply the rapidly growing markets in Asia? Or to develop to meet the high level of demand for organic products?Read More
A recovery sustained by domestic consumption, and recently, increased investment
Following a 35% collapse when the crisis hit, car sales in the United States in 2014 were back at the levels they were at in 2007. The recent fall in oil prices (-48% in 2014) undoubtedly contributed to this. But the recovery of this sector so severely damaged in the crisis, is also being driven by two key factors.
Loser: North American energy sector affected by an imbalance in supply and demand
Following the clear improvement in sectorial risk in North America at the end of 2014 (3 sectors reclassified “low risk”: Textiles and Clothing, Transport and Chemicals), Coface has responded to the fall in crude oil prices by downgrading the Energy sector to “medium risk”.
Coface upgrades country risk assessments of two European economies and places Brazil under negative watch
Business environment in Russia downgraded to C
Improvements in country risk are increasingly perceptible in advanced countries, where growth is expected to rise in 2015 (+2.1%). The Eurozone, driven by Germany and Spain, records two positive changes with the Netherlands and Belgium rising by a notch. Changes vary widely in emerging countries, however (downward growth revision, to 4.2%). Brazil and Ecuador are placed under negative watch and Russia sees its business environment assessment downgraded.
More than three years after the official recovery, advanced economies are struggling to return to a path of sustained growth. Some are even forecasting stagnant growth, a situation sometimes seen as irreversible. But not all advanced economies are in the same position when it comes to this risk of long-term stagnation and some exceptions stand out in what is a fragile global landscape. Which of the OECD’s advanced economies have what it takes to accelerate their growth over the next decade?Read More
Latin America is a major producer of commodities and the recent drop in oil prices is impacting the region’s countries in different ways. Which countries could benefit from lower international quotations - and why are others negatively impacted?
Oil prices have been in freefall over recent months, from their peak of 114.81 USD onJune 20 2014, to 48.47 USD on January 28 2015 (see chart 1). The 57.8% contraction is associated with an increase in output, combined with lower demand. On the supply side, the recent shale revolution in the US has raised production in the country to the highest level in three decades. In counterpart China, which is the main consumer (12% of total oil consumption), has demanded lower volumes due to the slowdown in GDP growth. The OPEC decision on November 27 to keep production at the same levels, contributed to the downwards pressure on oil prices. The goal behind OPEC´s decision is to discourage investments in new shale fields, as it reduces their relative profitability.
Slower growth and increase in non-performing loans expected in 2015
A new Coface survey on corporate credit risk management in China reveals that 8 out of 10 corporates experienced overdue payments in 2014. Coface,a leading global credit insurance group, forecasts that GDP growth will slow down to 7% in 2015 (vs 7.4% in 2014). As corporates are still facing the challenges of high leverage, the high cost of financing and low profitability (driven by overcapacity), it is expected that non-payments will not improve in the short term.
Three decades ago, Latin America was associated with negative terms such as ‘dictatorship’, ‘debt crises’ and ‘high inflation’. Over the years, the region has begun to be associated with economic growth, the new middle class, poverty reduction and controlled inflation.In this edition of Panorama, we have decided to focus on two countries of the Pacific Alliance: Mexico and Peru. Mexico appears to have a medium term positive outlook. Peru’s case is also interesting and the country’s medium-term prospects are very favourable. Peru was identified as one of the 10 ‘new emerging markets’ by Coface earlier this year.Read More