Overview of risks in advanced and emerging countries -...
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Overview of risks in advanced and emerging countries Grzegorz Sielewicz CEE Chief Economist Coface Country Risk Conference Vilnius, 11 th May 2017
Transcript of Overview of risks in advanced and emerging countries -...
Overview of risks in advanced and emerging countries
Grzegorz SielewiczCEE Chief Economist
Coface Country Risk ConferenceVilnius, 11th May 2017
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Recovery in global growth
Business confidence (2010-2016 average = 100)
80
85
90
95
100
105
110
115
01/16 04/16 07/16 10/16 01/17
Euro areaUnited StatesBrazilChina
Source: Datastream, Coface
-0,6
0,6 0,4 0,5 0,4 0,5 0,6 0,4 0,4
-1,0
0,40,3
-0,2 0,0
0,2 0,30,3 0,3
-0,7
0,7
0,2 0,3 0,30,3 0,2
0,2 0,2
0,7
0,9
0,9 0,8 0,90,9 0,9
1,0 1,0
-0,2
1,7
1,4 1,11,0
0,9 0,6 0,6 0,9
-1,9
4,3
3,12,6 2,6 2,8
2,7 2,52,8
-3
-2
-1
0
1
2
3
4
5
2009 2010 2011 2012 2013 2014 2015 2016 2017
United StatesEuro zoneOther advancedChinaOther emergingWorld growth
Forecast
Coface world GDP growth forecast
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Are financial markets becomingtired of politIcal risk?
Sources: Reuters, CofaceSource: Coface
0 10 20 30
Référendum italien (Déc.2016)
Election américaine (Nov.2016)
Référendum britannique(Juin 2016)
Grèce : A.Tsipras nomméPM (Jan. 2015)
Grèce : 4ème & 5èmeplans d'austérité (T3 2011)
Grèce : 1er plan desauvetage (T2 2010)
Greece: First bailout plan(Q2 2010)
Greece: 4 th & 5th
austerity packages (Q3 2011)
Greece: A. Tsipras swornas PM (Jan. 2015)
UK referendum(June 2016)
US election(Nov. 2016)
Italy’s referendum(Dec. 2016)
Political uncertainty & stock market volatility Stoc k market volatility after a major political shock (VIX, 1-month average)
Global political uncertainly index (EPU) VIX index (RH S)
0
10
20
30
40
50
60
0
50
100
150
200
250
300
350
400
06-00 06-03 06-06 06-09 06-12
Incertitudes politiquesmondiales (EPU)Indice VIX (éch.d.)
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US: will Trump manage to delay the end of the cycle?
US: Corporate profits, building permits and vehicle sales
Sources: Coface, BEA
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UK: rising inflation impacts sectors in different ways
UK: Coface Sector Risk Assessments
Source: Coface
UK: Impact of a 15% depreciation of the GBP (% points, REER)
Source: Coface
Low risk Medium risk High risk Very high risk
Low risk Medium risk High risk Very high risk
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Businesses: fewer insolvencies, but still little business creation
Business creations(% change between 2015 and the pre-crisis peak)
Sources: National sources
Business insolvencies: 2017 growth forecast (%)
Sources: Coface forecast, national sources
36,5%
-0,1%
-4,1%
-5,1%
-19,8%
-20% 0% 20% 40%
R-U
France (2016)
Italie
Etats-Unis
Allemagne
36,5%
Germany
US
Italy
France (2016)
UK
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Coface sector risk assessments
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Emerging markets: slight economic upturn in 2017
Emerging markets: 2017 Growth forecasts by sector
Sources: Coface, Oxford Economics
2017-2016 Growth change in pp
2017 Growthforecast
Agro
Metals
Chemical
ConstructionAuto
Pharma
Pulp & paper
Transport
Oil & gas
Textile Clothing
Retail
Emerging markets
Consumer electronics
Services
0
1
2
3
4
5
6
-2,5 -2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 2,5
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Corporate debt and banking riskgo hand in hand
Banking credit condition survey(below 50 = tightening)
Sources: IIF, Coface
Corporate debt to GDP ratio(Change between Q2 2015 et Q2 2016 in pp)
Sources: Coface, BIS
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-5%
5%
15%
25%
2006 2009 2012 2015-200
-150
-100
-50
0
50
100
150
2012 2013 2014 2015 2016
China: from one bubble to another
Sources: Bloomberg, CEIC, Coface
1. Stock market(CSI 300 index)
2. Capital outflows(USD bn / month)
3. Bond market(5-year sovereign bond yield, %)
4. Real estate market(average national price, RMB/sqm)
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
5 500
2012 2013 2014 2015 20162,0
2,5
3,0
3,5
4,0
4,5
5,0
2012 2013 2014 2015 2016
5.0
4.5
4.0
3.5
3.0
2.5
2.02012201320142015201620122013201420152016 2012 2013 2014 2014 2016 2006 2009 2012 2015
5,5005,0004,5004,0003,5003,0002,5002,0001,500
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Country Risk Assessments
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Country Risk Assessments: Advanced economies
January January January March June October January March
Germany A2 A1 A1 A1 A1 A1 A1 A1 A1Austria A2 A1 A1 A1 A1 A1 A1 A1 A1Switzerland A1 A1 A1 A1 A1 A1 A1 A1 A1
Australia A2 A2 A2 A2 A2 A2 A2 A2 A1Belgium A3 A3 A2 A2 A2 A2 A2 A2 A1United States A2 A1 A1 A1 A2 A2 A2 A2 A1
France A3 A3 A3 A3 A2 A2 A2 A2 A1Iceland A3 A3 A3 A3 A3 A3 A2 A2 A1Japan A1 A1 A1 A2 A2 A2 A2 A2 A1
Netherlands A3 A3 A2 A2 A2 A2 A2 A2 A1Canada A1 A1 A2 A2 A3 A3 A3 A3 A1
Spain B A4 A4 A4 A4 A4 A3 A3 A1Finland A2 A2 A2 A2 A3 A3 A3 A3 A1Ireland A3 A3 A3 A3 A3 A3 A3 A3 A1Italy B B B B A3 A3 A3 A3 A2United Kingdom A3 A2 A2 A2 A2 A3 A3 A3 A1
Portugal B B A4 A4 A4 A4 A4 A4 A2
Cyprus C C C C C C B B A3Greece C C C C C C C C A3
Business Climate
20152014 2016 2017Country Risk Assessment
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Country Risk Assessments: Emerging economies (1)
January January January March June October January March
Chile A2 A2 A3 A3 A3 A3 A3 A3 A2Korea A2 A2 A2 A2 A3 A3 A3 A3 A2
India A4 A4 A4 A4 A4 A4 A4 A4 B
Indonesia A4 A4 A4 A4 A4 A4 A4 A4 B
Malaysia A2 A2 A2 A3 A4 A4 A4 A4 A3
Philippines A4 A4 A4 A4 A4 A4 A4 A4 B
Thailand A3 A4 A4 A4 A4 A4 A4 A4 A4Colombia A4 A4 A4 A4 A4 A4 A4 A4 A4Uruguay A4 A4 A4 A4 A4 A4 A4 A4 A4China A3 A3 A4 A4 B B B B B
Sri Lanka C B B B B B B B B
Vietnam C C B B B B B B C
Argentina C C C C C C B B BMexico A4 A4 A4 A4 A4 A4 B B A4Bangladesh C C C C C C C C C
Brazil A3 A4 C C C C C C A4Venezuela C D D D E E E E E
Country Risk Assessment
2014 2015 2016 2017 Business Climate
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Country Risk Assessments: Emerging economies (2)
January January January March June October January March
Israel A3 A3 A3 A3 A3 A3 A3 A2 A2
Qatar A2 A2 A2 A2 A3 A3 A3 A3 A3
UAE A3 A3 A3 A3 A4 A4 A4 A4 A2
Saudi Arabia A4 A4 A4 A4 B B B B B
Oman A3 A3 A3 A4 A4 B B B A4
Kazakhstan B B B C C C C C BRussia B C C C C C C C CBelarus D D D D D D D D DUkraine D D D D D D D D DIran D D D D E E E E C
Iraq D D D D E E E E E
Country Risk Assessment
2014 2015 2016 2017 Business Climate
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Country Risk Assessments: CEE
January January January March June October January March
Czech Republic A4 A4 A3 A3 A3 A3 A3 A2 A2Estonia A3 A3 A3 A3 A3 A3 A2 A2 A1Lithuania A4 A4 A4 A4 A3 A3 A3 A3 A3Poland A3 A3 A3 A3 A3 A3 A3 A3 A2Slovakia A3 A3 A3 A3 A3 A3 A3 A3 A3Slovenia A4 A4 A4 A4 A3 A3 A3 A3 A3Latvia B B B B A4 A4 A4 A3 A3Bulgaria B B B B B B A4 A4 A4Hungary B B A4 A4 A4 A4 A4 A4 A3Romania B B B B A4 A4 A4 A4 A3Croatia B B B B B B B B A3Serbia C C C C C C B B B
2014 Business Climate
Country Risk Assessment
201720162015
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Various Risk-Reward Profiles
Risk
Country Risk Assessments
GD
P g
row
thIndia China
Indonesia Sri Lanka
Philippines Vietnam above 5%
Kenya Bangladesh
Ghana
Poland Turkey
Korea Ukraine
Thailand 3-5%
Colombia
Romania
Germany Finland Saudi Arabia
France Italy Mexico
USA Spain South Africa 1-3%
Sweden UK Brazil
Czech Rep. Hungary Russia
A1-A2 A3-A4 B-C-D
