The probability of a global recession is becoming clearer, Coface reported. The company lowered its forecast of global GDP growth to 1.9% in 2023 and at the same time maintained its assessment of risk for Poland at the A4 level (business defaulting risk: reasonable).
In its quarterly barometer, Coface lowered the score for eight countries. Once again, mainly European countries are affected, including Italy, Denmark and Switzerland. In addition, 49 sector-specific downgrades in different geographic regions show a clear deterioration in conditions in industries reliant on economic cycles, such as construction, metal industry and wood processing, according the report “Country & Sector Risk Barometer – Q3 2022 “.
Almost half of the 49 sector-rating downgrades concern energy-intensive industries such as the chemicals, paper and metals industries, the report also said. Contrary to the previous quarter, when most of them concerned Europe, the ratings of these sectors were also lowered for most Asian economies and for example, also for South Africa.
Most of the risks outlined in the previous Barometer have materialized: the worsening of the energy crisis in Europe (disruptions in flows), sustained inflation and aggressive monetary tightening worldwide. Against this background, we have significantly lowered our global growth forecast for 2023. 2001, 2008, 2009 and 2020, global growth will be below 2% While we have lowered our growth forecasts for all regions of the world, Europe is without doubt the region whose prospects have worsened the most over the summer. seems inevitable in all major European economies, with most of them even going to show negative growth throughout the year, it was stated.
As a result, most of our country-specific risk cuts in Q3 apply to European economies. Coface revises 6 consecutive ratings downwards, especially in the 3 countries for which the risk was still considered very low until now: Denmark, Switzerland and Luxembourg. Only Norway, as a gas producer, can still enjoy the best risk assessment, the report also said.
Global tightening of monetary policy is clearly undermining the prospects for the global construction sector, Coface reported.
Industrial metals and wood prices have been steadily falling in recent months and since the beginning of the year they have decreased by 20% and 60% respectively, prompting Coface to downgrade these sectors in several geographic areas.
Source: Coface and ISBnews
