Publicat de Elena Icleanu
12 Sep 2016 10:51
|Unsurprisingly, global growth prospects regarding countries' ratings have not improved since Coface latest update in March 2016. They have even deteriorated slightly (global growth forecast revised downwards by 0.2% to 2.5%), particularly because of the United States. Few improvements are expected for 2017, since the analysts expect global growth to remain lower than 3% for the sixth year running, and therefore stuck in a "Japanese-style" trap of sluggish growth. Like in Japan since the middle of the 1990s, this lacklustre growth goes hand in hand with a low level of inflation: consumer prices are expected to rise only 2.9% worldwide on average this year according to the IMF, i.e. the lowest growth rate since 1980. For advanced economies only, inflation will probably be even lower than 1%, which is once again unprecedented. Companies are negatively affected by this environment: because of the listless growth they lack outlets, while the low inflation rate limits their pricing power. Against this backdrop, the company risk is increasing according to our country ratings, which measure their average credit risk in 160 countries. The global average of these ratings shows a marked increase in the risk level for companies worldwide. What is worse is that the current level is at a peak not seen since the early 2000s, the period when these country ratings were created. In Romania, the growth, under the impetus of internal demand, should increase again in 2016 to reach a high level, above its potential. Household consumption (70% of GDP), which has already benefited from doubled family allowances in mid-2015, will be boosted by rising wages induced by the strong employment and falling unemployment, increased public sector pay and the reduction in standard VAT from 24 to 20% as of January 2016. Housing, as well as company investments, will benefit from increased confidence and, in terms of the latter, tax exemptions on reinvested profits and a guaranteed loan scheme for the SME sector.