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Sustained economic recovery in Europe, uncertain in the United States, according to Coface

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12 July 2017 11:30

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The economic recovery in Europe lasts, then it is uncertain in the United States and China, according to the economic report quarterly to the insurer specializing in insurance customer account Coface.

In Europe, Coface reported that the favorable conditions of financing, the investments supporting the growth and renaissance of trust in the corporations to maintain the economic recovery. In addition, insolvencies are reduced in almost all countries, except the United Kingdom and Belgium, where it is expected to increase by 9 % and 5 %, respectively.

In addition, the insurer has improved the ratings of Spain (A2), which is experiencing growth and international trade dynamic, and that of Portugal (A3), which is removed from the excessive deficit procedure of the european Commission.

Several sectors that stabilize

Several sectors have a positive ripple, especially that of the agri-food, valued at «average risk» due to the rising prices of raw materials and at the end of the bad conditions of agriculture. The metal sector in Germany is also rated at » medium risk «, while the automotive industry in Italy has been promoted to » low risk «.

In central Europe, the sector of the pharmaceutical is classified as «low risk» due to an increase in demand, both internal and external, and the energy is raised to «medium risk» thanks to the profitability of the oil companies and an anticipation of increased demand.

 

 

The United States send conflicting signals

Several conflicting signals show signs of uncertainty about the U.s. economy (A2). Coface notes that although GDP improved in the first quarter, from 0.7 % to 1.2 %, and the rate is at its lowest over the last 16 years, household consumption continues to falter. The increase in interest rates may slow down credit growth.

In addition, the production of crude oil and the industry of oil services on earth continue to grow thanks to the easing of regulatory, passing the energy sector, u.s. «very high risk» to » high risk.»

Performance variable for emerging countries

The insurer note a slight recovery in Russia, which the rating has been promoted to B. investments and industrial production are rising, while retail sales will drop off more because of the control of inflation. The growth of automobile sales will change the rating to » high-risk «. Uzbekistan benefits from the economic recovery of Russia and rating of C.

However, the indicators will return to red China, whose rating has been lowered to B by June 2016. The country’s economy slows and the risk of insolvency increases due to credit terms stringent. The odds of the automotive sector to drop to » high-risk «. In India, the agri-food sector has seen its rating raised to » medium risk «.

Increased risk in Africa and the Middle East

The political tension increased and the fall in the price of oil and gasoline have increased the risks for the countries of the Middle East and Africa. Coface has reduced the rating in Qatar (A4), Bahrain (C), Namibia (B), and Mauritius (A4).

Moreover, the odds of the pharmaceutical sector has been lowered to «medium risk» in Saudi Arabia and the united arab Emirates due to a decrease in public spending.

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