Coface Country & Sector Risks Handbook 2024: Major Trends of the World Economy

COFACECOUNTRY &SECTORRISKS HANDBOOK2024 MAJORTRENDS OFTHEWORLDECONOMY ANALYSISANDFORECASTSFOR160COUNTRIESAND13SECTORS Thishandbookisintendedfor: —Corporateexecutiveswithdecisionstomakeintermsofexport,projectlaunches,orinvestmentinhighriskcountries; —Managersofriskorinternationaloperationsinbanking,multilateralfinancialinstitutions,andinsuranceorreinsurancecompanies(actinginaprivatecapacityoronbehalfofgovernment); —Governmentmanagersconcernedwithcountryrisk; —Consultantsandlawyersspecializedininternationalbusiness; —Researchers,academics,andstudentsinterestedincountryrisk. Withcontributionsfrom: —CofaceEconomicResearchDepartment: KhalidAït-Yahia,BernardAw,EveBarré,LucileBembaron,ChristianevonBerg,Jean‑ChristopheCaffet,MarcosCarias,NouriChatillon,ElénaCollin,AroniChaudhuri,AnnaFarrugia,JoãoFerraz,BrunoDeMouraFernandes,DominiqueFruchter,ApollineGrieveldinger,SeltemIyıgun,DianaKarachanski,PatriciaKrause,SimonLacoume,ErwanMadelénat,RubenNizard,ElisaPetit,LaurinePividal,GrzegorzSielewicz,JonathanSteenbergandIvanaTerlevic. COFACECOUNTRY&SECTORRISKS HANDBOOK 2024 ANALYSISANDFORECASTSFOR160COUNTRIES AND13SECTORS CofacecannotbeheldinanywayresponsibleforopinionsexpressedbythosewhohavecontributedtothepreparationofthisHandbook. CONTENTS P.02 FOREWORD ByXavierDurand,CEOofCoface P.06 COFACEGLOBALASSESSMENTS Toolsforidentifying,assessing P.04 handbook? –SECTORPROFILES Aguideforusingthe13sectorassessments –COUNTRYPROFILES Aguideforusingthe160country assessments Howtousethe andmonitoringtherisksbusinessesarefacing P.08 COUNTRYRISKASSESSMENTMAP Ageographicoverview ofthecountryassessments P.10 COFACECOUNTRYRISKASSESSMENTS Countryriskassessmenthistoryofthemaineconomies P.12 SECTORANDCOUNTRYPROFILESCONTENTS riskassessments Cofacesector P.14 SECTORS for2024in 160countries andoutlook P.29 COUNTRIES Economicrecord P.110 GLOSSARY FOREWORD 2024,backtonormal? —XavierDurand— CEOofCoface Ultimately,2023wasnottheannushorribiliswehadfeared.Fortunately,therisks,mostnotablyintermsofenergysupply,didnotmaterialise-inEuropeatleast.Theglobaleconomyisexpectedtohavegrownbyaround2.5%.Whilestillbelowitspotential,thisperformanceisnonethelessdecentgiventheheadwindsthatonceagainblewinovertheyear.Weshouldrememberthat2023beganwithabankingcrisisintheUnitedStatesandendedwithanewconflict,thistimeintheMiddleEast.Inthemeantime,Chinadisappointed,theUnitedStatesconvinced,andEuropesurvivedinasomewhatturbulentmonetaryandfinancialenvironment.Incontrasttoinvestors’expectations,themaincentralbankscontinuedtoraisetheirkeyrates(+100basispointsfortheFederalReserve,+175fortheBankofEngland,+200fortheEuropeanCentralBank),triggeringaseverecontractioninlendingandasharpriseinlong-terminterestrates.Thiswasnotenoughtoupsettheequitymarkets,whichwerefundamentallysupportedbytheresilienceofbusinessactivityandcorporatemargins.Thefaster-than-expectedfallininflationduetolowercommoditypricesand,attheveryendoftheyear,theprospectofmajorcentralbankssignificantlyloweringtheirkeyinterestratesalsocontributedtothismomentum. Themainreasonforthebetter-than-expectedoutcomein2023istheinitiallyunderestimatedresilienceofprivateagents’balancesheets.This‘balancesheetresilience’hasbeenattherootofavirtuouscirclecombining,untilnow,lowcorporatelosses,resilientemployment,andhouseholddissaving.ThiswasparticularlythecaseintheUnitedStates,whereconsumptionremainedanengineofgrowth(accountingfor1.5pointsofGDPin2023,withGDPgrowthestimatedataround+2.5%).However,thelatestfiguressuggestthatthisfinemechanismis startingtojam.Excesssavingsandcashflowhavedwindledsignificantly,whilecorporateinsolvenciesarefirmlyontherise,bothintermsoffrequencyandthesizeoftheclaimsconcerned. Howwill2024unfold?Rightoffthebat:theonlycertaintywecanhaveisthatofbeingsurprised.Theeventsinrecentyearshaveshownthathistoryisaccelerating,anditwouldbestrangeif2024wereanexception.Allthemoresoastheyearwillbeparticularlybusyfromanelectoralstandpoint,withlegislativeand/orpresidentialelectionsscheduledin70countriesthataccountforoverhalftheworld’spopulationandGDP:betweenTaiwanafewweeksagoandtheUnitedStatesinNovember,voterswillbecalledtothepollsinIndia,Pakistan,SouthAfricaandIran...nottomentiontheEuropeanelectionstobeheldnextspring,againstabackdropofheightenedsocialtensionsandtheriseofpopulismofallkinds.Thisshouldcauseafewupheavalsatnationallevel, «Theeventsinrecentyearshaveshownthathistoryisaccelerating,anditwouldbestrangeif2024wereanexception.»—XavierDurand inageopoliticalcontextthatisstillinturmoil:thewarinUkraineisenteringitsthirdyear,andtheconflictbetweenIsraelandHamasnowthreatenstosetthewholeregionablaze. Fromastrictlymacroeconomicpointofview,thehopeofaprolongedbutstillsoftlandingfortheglobaleconomyremainsvalid.Whileafewmonthsagowefearedtheonsetofseveremarketturbulence,theeasingoffinancialconditionsmeansthatwecanlookforwardtotheyearaheadmorecalmly.Ourcentralscenariothereforerulesoutthehypothesisofafinancialcrashandahardlanding.Nevertheless,theglobaleconomyissettoslowsubstantially,losingalmosthalfapercentagepointofgrowthcompar