Coface Q3-2023 barometer - Focus on Switzerland
Coface takes the view that the global economic situation is tense, but the risk level in Switzerland can be described as low overall. According to a recent assessment, risks are on the rise in economies such as Finland and Sweden.
For the third quarter of 2023, we continue to rate the risk situation for the Swiss economy as low (A2) in our country and sector risk barometer. Despite the prevailing positive outlook for the global economy, we maintain a somewhat pessimistic perspective. One key factor contributing to this view is the ongoing challenges in addressing inflation, and we anticipate a contraction in economic growth ranging from -0.2 percent to 2.2 percent in 2024. The energy sector has a significant role in this assessment, with increased tensions in the wake of recent events in Israel affecting the oil market. Furthermore, stock markets are experiencing declines, and corporate profits are undergoing negative adjustments.
During this evaluation, we downgraded five countries compared to the previous quarter: Colombia, Niger, Finland, Sweden, and New Zealand. In the case of the latter three, these advanced economies were downgraded from A2 to A3. Only Belize and Mongolia experienced rating upgrades. In our analysis of 33 economic sectors, we observed improved risk conditions in 17 sectors while 16 others showed increased risks. In Switzerland, we noted an improved risk situation in the energy and textile clothing sectors, but higher risks in the Swiss construction sector, despite its better performance compared to Western Europe. Currently, no sector in Switzerland is considered to be of very high risk, aligning it with the risk profile in the Netherlands. In Western Europe, the pharmaceutical sector in Switzerland, the Netherlands, and Spain stands as the sole industry assessed with low risk.
The risk assessment for Switzerland’s most important trading partners, Germany and USA, is A3 and A2 respectively. For Germany, there were two sectoral downgrades in the most recent evaluation, with four sectors (paper, wood, construction and textile clothing) now assessed as very high risk. No changes were processed for the USA, where it is only the textile clothing sector that is assessed as being very high risk.
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