Reports

Recent surge in coronavirus cases and slow vaccination rollout affect Indonesia's GDP

As vaccination campaigns are underway, the world economy is recovering from the pandemic. Advanced markets generally have higher vaccination rates than emerging markets

The African Continental Free Trade Area has raised opportunities for both African and non-African companies. The agreement could contribute to growth after the negative impact of the Covid-19 pandemic

The Economic Update, presenting the current economic environment across the globe and the outlook by Atradius Economic Research.

An economic rebound of more than 4% expected in 2021, but vulnerability to to global financial market turmoil remains an issue

An economic contraction of more than 4% as domestic demand has suffered

Despite a forecast growth slowdown in 2019 the economy should still experience positive momentum, with low unemployment and manageable inflation.

Despite decreases the level of payment delays and insolvencies will remain high in 2017 as a full-scale rebound is not expected for the time being.

The recovery of the construction sector has finally gained some momentum, but competition remains fierce, and prices and profitability are still low.

Despite continued growth during the last ten years and a benign outlook the level of building activity seen in the 1990s has not been reached again.

The recovery of the Dutch construction sector continued in 2016, but there is still overcapacity in the market, and a consolidation has yet to take place.

Uncertainty in the British construction market is expected to increase in the coming years, especially as a ‘hard Brexit’ seems to be most probable.

Italian building cooperatives and smaller companies focused on domestic residential construction remain highly exposed to the risk of business failure.

Future US construction growth could get an additional boost if, as announced, the new US administration invests heavily in infrastructure improvements.

A modest recovery is forecast in the non-residential segment due to stronger private demand and activity picking up in the infrastructure building sector.

Due to the deterioration in demand competition has increased, as builders operate on lower margins in order to obtain the remaining available business.

Private building projects are expected to decrease due to less benign economic conditions and an increased supply completed housing projects and offices.

Construction payment delays and insolvencies have decreased, mainly because financially weak players already left the market during the past downturn.

Value added construction growth is expected to grow by more than 2.5% in 2017, but due to fierce competition many smaller players have low margins.

After rising in 2016, non-payments are expected to increase further in the coming six months, while business closures are also increasing further.

The price of oil has stabilised, largely thanks to OPEC’s shift in policy. The market is expected to rebalance in 2018 driving up prices in the medium term.

The on-going economic slowdown, overcapacities and high indebtedness of many businesses will lead to further increasing business insolvencies in 2017.

India’s economic growth outlook for 2017 remains robust, but a rather weak banking sector and high foreign indebtedness of domestic firms remain concerns.

Despite an expected GDP growth rate of more than 5% in 2017 structural weaknesses remain, and firms are increasingly vulnerable to currency volatility.

Subdued economic growth despite massive stimulus measures remains an issue, while exports are helped by a yen depreciation against the USD in 2017.

A prudent fiscal policy has limited the consequences of low oil and gas prices, but the economy is vulnerable to a hard landing of the Chinese economy.

GDP growth is expected to remain at a level of about 6% in 2017, but growing political uncertainty could hamper business sentiment and foreign investment.

In 2017 the economic performance continues to be impacted by weaker demand from China and other Asian countries, but strong fundamentals remain.

Growing political uncertainty after the president´s impeachment, subdued private consumption, and lower exports to China weigh on economic growth.

Growing competition from mainland China in the electronics sector require productivity increases and a diversification of the economy in the long-term.

GDP is forecast to grow about 3% in 2017, but high household debt, inequality and low incomes will put downward pressure on consumption growth.

High growth of more than 6% in 2017, but economic fundamentals still show some weaknesses and Vietnamese businesses suffer from limited access to capital.

Gas prices have bottomed out and Atradius expects them to increase over the period up to 2021. Demand will be more moderate, but fueled primarily by China.

The demand situation is benign, but food businesses continue to suffer from margin pressure due to high labour and energy costs and stiff competition.

While German food exports continue to increase, domestic market conditions have become increasingly difficult. Overcapacity is an issue in some segments.

Smaller food retailer and wholesalers margins remain under pressure and are expected to lose further market share, while customer behaviour is changing.

The current trend of merger and acquisition towards a subsequent consolidation in the US food market is expected to accelerate in the coming years.

Exports are of major importance for the French food sector (especially for the beverages segment), positively contributing to the French trade balance.

Sector risks have increased after the Brexit decision, and exporters to the UK have already suffered shrinking margins due to currency volatility.

Business failures in the Polish food retail segment have increased in 2016, as mainly smaller players suffer from fierce competition and low margins.

Large food businesses are active globally and performing well, while smaller producers and wholesalers generally face tough competition and low margins.

Gearing of food businesses is generally high, and can be a significant risk for companies with weak profitability and focus on the domestic market.

The outlook for food exports remains positive, with further demand growth from overseas expected, due to the strong reputation of “Made in Italy”.

The economic downturn of two main export markets - Brazil and Angola - has led to reduced exports and, to some extent, investment levels in the sector.

While the industry is still fragmented, consolidation is on-going and companies should gain size and become more competitive domestically and abroad.

Economic growth is expected to pick up in 2017, but uncertainty about the new US administration (potential protectionist trade policies) casts a shadow.

The consequences of any US shift on its Mexico policy remain to be seen, but increased currency volatility has already an negative impact on the economy.

Steady, but uneven growth is expected to persist. Domestic demand is the main driver of expansion, but manufacturing and export performance remain subdued.

Pressures on international trade are mounting around the globe and the outlook is increasingly uncertain.

Nearly 90% of the survey respondents in Asia Pacific reported having experienced late payment of invoices from their B2B customers over the past year.