bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 21.10.2017 | Name days: Severīns, Urzula
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

Professor: by taking money away from science, the state shoots itself in the foot

The matter regarding insufficient funding for science has recently become more topical in the public space. President of Latvian Academy of Sciences Ojārs Spārītis is rather critical of the situation: Latvia has lied to the European Union and European Commission about making sure that funding for science reaches 1.5% of GDP by 2020.

To prevent fraud, audit of MPC recipients to be performed in Latvia

Latvian Economy Ministry intends to perform an audit of mandatory procurement component recipients and use new regulations to combat fraudulent activities, as confirmed by Economy Minister Arvils Ašeradens.

Rail Baltic procurements to be processed using Electronic Procurements System

Following the changes to Latvian Republic’s Public Procurements Law, all new procurements for Rail Baltica administered by RB RAIL will be processed using a free electronic information system and its e-contest subsystem.

Estonian construction price index pushed up by wages

The construction price index in Estonia has in July-September of 2017 increased by 0.9% in comparison to second quarter this year and by 1.7% from July-September of 2016, Estonian statisticians have estimated.

Surplus of Latvia’s government budget reached 9.5 million euros in 2016

In 2016 general government budget surplus accounted for EUR 9.5 million or 0.04 % of the Gross Domestic Product, whereas general government consolidated gross debt amounted to EUR 10 091.6 million or 40.6 % of the GDP.

Latvia to invest EUR 5.9 million into formation of unified port network

Ports of Riga planning region and Kurzeme planning region have commenced an important tourism project. The goal of this project is creating a unified yacht port network in Latvia and Estonia with quality services that would allow developing sailing tourism and attract foreign sailing enthusiasts in the future, reports the regions’ representative Inese Ozoliņa.

Graft-suspected Tartu deputy mayors resign

In Estonia's second largest city, Tartu, Deputy Mayors Artjom Suvorov and Valvo Semilarski have stepped down from office, Estonian press reported, after the politicians were arrested under suspicion of graft.

Expert: workers of Latvia’s NGO sector have high ‘burnout’ risk

Workers of Latvia’s NGO sector have a high burnout risk, said once the director of Providus Dace Akule in an interview to Latvijas Radio.

Producer: many young people come to work in the film industry

Latvia’s film industry has been steadily growing these past several years, and it is especially gratifying that many young people are coming to work in the industry, says director and producer, representative of Film Angels Productions Jānis Kalējs.

Pollution blamed for every sixth premature death globally

Nine million premature deaths globally in 2015 are said to be related to pollution, a study has found pointing to presence of harmful matter in air, water and workplace as the three main risk factors.

Infectologist: influenza kills biologically the weakest, including children and pregnant women

Influenza is an infection that affects both children and adults. However, it kills those who are biologically weak, says Immunization State Council chairperson and infectologist of Children’s Vaccination Centre Dace Zavadska.

Investor activity made easier between Latvia and Vietnam

An intergovernmental agreement has been signed between the Republic of Latvia and Socialist Republic of Vietnam on prevention of double taxation and tax avoidance in relation to income tax.

Colder masses of air to enter Latvia in coming days; precipitation to be limited

Although high atmospheric pressure will be present above Latvia in the coming days, southern regions in Latvia will experience short-term precipitation on Saturday, 12 October, caused by the cyclone active above Poland. Colder masses of air will enter Latvia in the coming days.

Maltese journalist said to be killed by remotely-controlled explosive

Officials in Malta have unveiled it is assumed that investigative journalist Daphne Caruana Galizia was murdered by an explosive places under her car, which was detonated remotely.

Prime Minister: Latvia cannot accept additional asylum seekers

Latvia cannot afford to resettle additional asylum seekers, said Prime Minister Māris Kučinskis during his meeting with European Commission President Jean-Claude Juncker on Thursday, 19 October.

Scandinavians purchase tourism company in Lithuania; changes expected in Latvia too

Dutch Otravo online travel organization has expanded and has purchased Lithuanian online travel agency Interno Partneris, thereby entering the Baltic market.

Ombudsman: non-citizen status matter should be resolved in next decade

The next ten years may be the transition period to ‘put an end’ to the non-citizen status in Latvia, said ombudsman Juris Jansons in an interview to LTV programme Rīta panorama.

Swedish Foreign Minister: harassment exists at highest political level

The Foreign Affairs Minister of Sweden, Margot Wallström, has commended the current sexual assault and harassment awareness campaign in social media and urged to fellow politicians to address the problem.

Latvenergo recognized as Latvia’s most valuable company for tenth time

Latvenergo has been recognized as Latvia’s most valuable company in 2017. Its value grew 34% in comparison with 2016, according to the TOP 101 list of Latvia’s most valuable companies compiled by Prudentia and Nasdaq Riga.

Number of births and number of deaths decline in Latvia

During the first nine months of this year 15,723 babies were born in Latvia, which is 1,113 children fewer than in the corresponding period of the last year.

CC applies binding conditions for the sale of MTG Broadcasting AB

Latvian Competition Council has decided to permit Bite Lietuva to purchase MTG Broadcasting AB group’s businesses in Latvia. CC has applied several binding conditions to prevent a possible impact on competition on the television services and advertisement market.

Eesti Energia warns: Limiting CO2 emissions on capacity could endanger energy supply

Estonian energy giant Eesti Energia has evaluated that a plan under discussion in the European Union to introduce a carbon dioxide release limit for capacity mechanisms to qualify for subsidies could adversely affect the security of supply in Estonia and the Baltic states.

Solidarity tax norm recognized as non-compliant with Latvia’s Constitution

On Thursday, 19 October, the Constitutional Court of the Republic of Latvia declared the Solidarity tax norm as non-compliant with the country’s Constitution.

Survey: Riga residents go to the doctor’s the most often

34% of residents undergo regular health checks, according to Mana Aptieka & Apotheka health index. In addition, women are twice as serious about health checks as men.

LG cozies up with idea of rebuilding railway tracks to Reņģe, Latvia

Lithuania‘s Lietuvos Geležinkeliai has sent a mixed message as to what it intends to do next following an EC fine of nearly 28 million against it over the dismantling a 19-km railway stretch with the Latvian village of Rengė.