bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 24.06.2018 | Name days: Jānis
LatviaLatvia

Expert: global economic growth rates to slow down this year

FaceBook
Twitter
Draugiem
print
(+1 rating, 1 votes)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU, Maris Lukins

Coface Latvia Head Maris Lukins

A moderate global economic slowdown is expected this year,  forecasts credit risk insurers at the 15th Coface Country Risk Conference in Paris.

Risks requiring particular attention include the difficult situation with sovereign debts in the eurozone and growth financing in the emerging countries. Coface points out a new tendency – converging between the advanced and the emerging countries’ risks, because the ratings of the emerging countries survived the crisis have increased, the business news portal BNN was informed by Coface Latvia spokeswoman Sandra Smiltniece.

According to Coface forecasts, the global economic growth rate in 2011 will drop to 3.4%, compared to 4% decline in 2010. It will be affected by the private-sector debt reduction, restrictive budget policy implementation in Europe, the possible raw material price gains and the anticipated global trade volume decrease. Growth in the adavnced countries will account for 1.8%, compared to 2.3% in 2010, while it will fall from 1.7% in 2010 to 1.4% in the eurozone. This small drop will have a negative (a minimal, though) impact on companies average credit risk, as the growth gap between 2010 and 2011 comprises only 0.6% of GDP.

The emerging countries have benefited from the crisis the most and they will keep developing also in 2011; however, at a slightly slower pace than before – 6.2%, compared to 6.7% in 2010. In contrast to the eurozone private debt bubble resulting in sovereign crisis, it does not hinder the emerging countries activity. However, they are not fully protected against growing private sector debts.

On the basis of the countries risk assessment experience, Coface has recorded positive trends in their rating changes last year, which marked an alignment between the advanced and emerging countries’ risks linked to the emerging countries’ results stability and business payment sustainability during the downfall. The emerging countries show high and stable performance and a strong financial basis, while the advanced countries’ ratings have dropped.

Although in 2009 Coface raised ratings, setting a positive watch for 23 countries, it lowered or determined it negative for 47 countries. Last year the rating was raised or regarded positive for 47, but only six countries’ rating was downgraded or placed under negative watch.

The credit rating increase was an important step for Estonia on the international level, but overall only 9 out of 28 advanced countries have returned to the pre-crisis level, the Head of Coface Latvia Māris Lukins says.

Starting from this year, the international credit risk insurers Coface have began to rate already 156 countries (previously 130), of which 28 are the so-called advanced countries. In determining the credit rating a country’s average business transaction risk is taken into account instead of the sovereign debt. The average indicator does not reflect each company’s rating; therefore, it is essential that the particular country’s business partners verify the specific company’s rating and payment history, M. Lukin emphasizes.

Before the crisis, the lowest rating among the advanced countries was A2, but nine emerging countries had at least A2 rating. In 2010, the lowest rating of advanced countries was A4, and already for 27 emerging countries, including China, Turkey, Brazil, India and Poland, the rating was at least equal to A4, outpacing Greece, Ireland and Portugal, who are now struggling with the private and public sector debt. Turkey is now only one notch below the United Kingdom, while Poland has a better rating than Iceland.

Traditionally, the concept of country’s risk has been attributed to emerging countries with major risk related to debt in foreign currencies. However, the eurozone has shown it is possible to experience a downfall with a very high external debt in local currencies. This working framework is losing its efficiency, indicated Coface Chairman François David, adding that these changes confirm our chosen methods: Coface has never made a distinction in terms of nature between the emerging countries and the advanced ones.


Leave a reply

BNN summary of the week: CPCB visit to Saeima; ministers survive no-confidence votes; DTV case ends with mild penalties

BNN offers a summary of this week’s topical news in a variety of categories: Ruling; Future; Trust; Measures; Calendar.

SRS uncovers numerous violations more than half of inspected companies

State Revenue Service’s Tax Control Office performed a total of 305 thematic inspections of employers in Latvia in Q1 2018. Authorities recorded violations in 171 inspections, according to information from SRS.

Third level pension plan deposit volumes reach new record value

Residents’ interest for pension savings remains high. The volume of deposits made to private pension funds in the first three months of 2018 has reached a new historic peak: a total of EUR 16.5 million has been paid to 3rd level pension accounts, which is 11.6% more when compared to the same period of 2017, as reported by Finance and Capital Market Commission.

Petrol station network in Latvia caught performing fraudulent activities with diesel fuel

State Revenue Service’s Tax and Customs Police have uncovered and put an end to a fraudulent scheme with diesel fuel performed by some network of petrol stations in Latvia, as confirmed by the service.

Kaimiņš: I believe CPCB is performing a political order

In the evening of Thursday, 21 June, Corruption Prevention and Combating Bureau released three people previously detained as part of a criminal process regarding possible illegal funding of KPV LV party – Saeima deputy Artuss Kaimiņš, his colleague Atis Zakatistovs, and businessman Viesturs Tamužs.

Latvia’s parliament conceptually supports new sanction regulations

On Thursday, 21 June, Saeima supported in the final reading amendments to the Law on International Sanctions and National Sanctions of the Republic of Latvia that are meant to improve sanction regime regulations to ensure efficient application of national and international sanctions, as reported by Saeima press-service.

Storm in Tallinn floods streets, cuts Croatia-Argentina match short on TV

A rain storm has hit northern Estonia on Thursday, flooding some streets in the capital Tallinn, damaged buildings and badly affected the broadcast of an interesting World Cup game.

American banks tested for financial stress show positive results

The U.S. has performed banking stress tests and found that the 35 largest banks operating in the country have enough funds on hand to sail safely through a severe financial crisis.

Saeima fires judge for coming to work in a drunken state

On Thursday, 21 June, Latvia’s parliament supported the proposal to dismiss Rezekne Court judge Arvis Garais from his post. 71 deputies voted in favour, no one abstained and no one voted against.

UK to have three requirements to EU citizens willing to remain in UK

For citizens of the European Union willing to continue living in the UK after the country leaves the bloc, they will have to submit applications and answer three key questions over the internet, according to the country's interior minister.

Weather in Latvia to be rainy and cool during Ligo; next week’s weather to be dry and hot

Weather at the end of the week in Latvia will be dictated by a cyclone. Because of that, there will be instances of rain on Ligo. Weather is expected to improve next week, however, according to Latvia’s State Environment, Geology and Meteorology Centre.

Lithuania’s blood plasma corruption scandal extends to Latvia

The former head of Lithuania‘s National Blood Centre, suspected of corruption and involvement in unlicenced activity, received more bad news this week from Latvia, where investigators of the Lithuanian Special Investigation Service had questioned the Latvian Health minister, Anda Čakša.

Administrative burden to be reduced for foreign students and researchers

The administrative burden will be reduced for foreign students and researchers, as well as all education and research institutions hosting them. This is provided by the amendments to the Immigration Law approved by the Saeima in the third reading on Thursday, 21 June.

Latvian Economy Minister endures no-confidence vote

Saeima declined opposition deputies’ request for dismissal of Economy Minister Arvils Ašeradens.

Swedbank economist becomes new member of Bank of Latvia Council

On Thursday, 21 June, Latvia’s Saeima approved Mārtiņš Kazāks in his new post as member of Bank of Latvia Council, as confirmed by Saeima’s press-service.

Pope Francis’ visit to Latvia will be a national holiday

Latvia’s parliament has approved in the final reading a law that makes 24 September – the day Pope Francis plans to visit Latvia – a national holiday.

ICT specialist numbers in Latvia are below Europe’s average level

In Latvia, information and communication technology specialists form only 2.2% of all employed people in the country, which is considerably below the average level in the European Union – 3.7%. Romania and Greece are the only two EU member states in which the number of ICT specialists is below Latvia’s, according to European Commission’s DESI index.

Hungary adopts prison sentence for helping migrants

Hungarian National Assembly has passed a set of laws criminalising with prison terms some help provided to illegal immigrants by non-governmental organisations.

Harmony plans turning to Constitutional Court to prevent transition to Latvian language in schools

«Why should this reform stay unrealized? It is because schools are not prepared for cardinal changes coming from dozens of other reforms that have already shocked the country’s entire general education system,» says chairman of National Minority School Parents Forum and member of Harmony’s work group in Konstantīns Čekušins.

Deputies detained in KPV LV criminal case not declared suspects yet

Saeima deputy Artuss Kaimiņš and businessman Viesturs Tamužs detained in the criminal process regarding possibly illegal funding of KPV LV party have not yet been declared suspects. Both are currently in police custody. It is likely Kaimiņš will be released later today, 21 June.

Production of mines and grenades planned in Estonia

As the Estonian parliament has adopted new rules on military arms and ammunition production in the country, local defence firm Eesti Arsenal has voiced its plan to build a factory in Estonia to make military explosives.

Total tax debts in Latvia reached EUR 1.224 billion in June

At the beginning of June, total tax debts in Latvia, including topical, halted debts and extended repayment terms were equal to EUR 1.233 billion, which is 0.6% less compared to May, as reported by State Revenue Service.

Switch off internet nationwide during exams – Algerian approach

In an attempt to prevent cheating during secondary school exams, the north African nation Algeria, has turned off internet in its whole territory.

Control Service proposes kicking out shell companies as intensely as offshore companies

Shell companies in Latvia should be combated with the same intensity once shown to offshore companies, says chief of Anti-Money Laundering Service Ilze Znotiņa.

EU imposes tariffs on blue jeans, motorcycles and other U.S. export goods

The European Union will introduce retaliatory tariffs against U.S. exports on Friday, EU Trade Commissioner has stated a top official has stated in the bloc's reaction to Washington imposing steep duties on steel and aluminium earlier in June.

Newest comments