macroeconomic, risk and insolvency outlook europe: still looking … · 2019. 11. 14. · growth...

no. 1193

Macroeconomic, Risk and Insolvency Outlook

Europe: still looking for a second wind

www.eulerhermes.com | no. 1193 | March 2013

Euler Hermes Economic Research Department

Economic Outlook

2

Economic Outlook no. 1193 | March 2013 | Macroeconomic, Risk and Insolvency OutlookEuler Hermes

Economic Outlook no. 1193 | March 2013

Overviewpage 4

Editorialpage 3

Annex 2Economic forecastspages 18

Annex 3 & 4Country Risk Levels and Insolvency Methodologypage 20

Subsidiariespage 22

Economic OutlookSeriespage 21

ContentsMacroeconomic, Risk andInsolvency Outlook | March 2013

no.1193

Euler Hermes Economic outlook is issued ten times a year by the Economic research department of Euler Hermes. It is also available on subscription for other businesses and

organisations. Reproduction is authorised, so long as mention of source is made. ▣ Publication Director and Chief Economist: Ludovic Subran • Macroeconomic Research:

Maxime Lemerle (Manager), Ana Boata, Mahamoud Islam, (Economists), Romeo Grill (Economist Germany), Dan North (Economist USA), Clément Bouillet, Laura Pages (Junior

Analysts) • Sector Research: Yann Lacroix (Manager), Bruno Goutard, Marc Livinec, Didier Moizo (Sector Economists) • Country Risk Research: David Atkinson (Manager),

Andrew Atkinson, Manfred Stamer (Economists) • Graphic Design: Claire Mabille • Editor: Martine Benhadj • Support: Valérie Poulain, Mathilde Lavaud • For further information,

contact: the Economic Research Department of Euler Hermes at 1, place des Saisons 92048 Paris La Défense Cedex – Tel.: +33 (0) 1 84 11 50 46 – e-mail:

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• Photoengraving: Evreux Compo, Evreux, France – Permit March 2013— ISSN 1 162 – 2 881 ▣ April 16, 2013

Latest changesin country riskspage 12

Annex 1

World tradepage 17

EH AmericasUnited States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dan NorthBrazil . . . . . . . . . . . . . . . . . . . . . . .Marcelo Oliveira, Felipe TanusCanada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dorothy VerweyEH Asia-PacificJapan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Keisuke MoriyamaChina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Edwin GaoAustralia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Collin LyonSouth Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .William ChanTaiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Willian ChanHong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .William ChanSingapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Raymond Tan

EH France France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Maxime LemerleEH DACH*Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Romeo GrillSwitzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Mark SchulzAustria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Marion KollEH Mediterranean and AfricaItaly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Andrea PignagnoliSpain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jose Luis MonteroGreece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Katerina PanagiotouPortugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .João Sales

EH Northern EuropeUnited Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . .Robin K JootunRussia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Svetlana ChaprasovaNetherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Freek FitPoland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Grzegorz BlachnioBelgium & Luxembourg . . . . . . . . . . . . . . . . . . . . . . .Paul Becue Sweden . . . . . . . . . . . . . . . . . . .Alexis Spanos, Anders BjorkmanNorway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .John JustadDenmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Stinus ChristiansenFinland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tiina BjörkqvistCzech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Daniel SeryHungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Gabor HarsanySlovakia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Martin BakRomania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Mihaela Bancu

Contributions for insolvency analysis * Germany - Austria - Switzerland

The start to the year has been harsh in Europe. Winter has not wantedto give way to spring, as agreed, and the only positive from this chill isperhaps its contribution to eurozone growth: nearly one-tenth of apercentage point of GDP in 2013, according to our estimates. That’salready something, isn’t it? Economists love using climate metaphors todescribe their forecasts: “chill in consumption”, “investors get cold feet”,“clear skies ahead for the global economy”, “headwinds”, “cloudsoverhanging the West”, etc. Myriad are the parallels between economicand meteorological hazards, so much have economies been navigatingby sight of late. In 2010 the seasonal lexicon appeared with the oft-mentioned “Arab Spring”, which, it has to be said, subsequently turnedinto winter, summer, fall, and then spring once again. In fact, it seemsthat seasonal changes arise as rapidly as new policies for theMediterranean periphery. In this economic outlook we provide our owncontribution to this much-vaunted literature by building on the idea of a“European Winter” in light of the bad winds that continue to batter Europewithout respite. There is a chill in consumption, investment is shaky,public spending is frozen, trade is bogged down, business lending hasdried-up and governance is numb: the European crisis blizzard carrieson. We thought we could see the first signs of spring, with the financialmarkets showing some green shoots, Frankfurt appearing to soften up –and then the snowstorm arrived (from Cyprus!), freezing over confidenceand institutions in its path. The good news is that, while the eurozoneremains in winter, the United States is in spring (a little wet, perhaps, butpleasant) meanwhile in large – and less large – emerging countries suchas Brazil, Russia, India, China, Turkey, Mexico, and Indonesia, to name justa few, temperatures are warming… although without thawing the core.Any solutions? Europe needs to turn on the heater! So the metaphor isclear: expansionary monetary policy (OMT), joint fiscal and industrialpolicy, banking union, debt restructuring, and efficient use of new toolssuch as the EFSF and the ESM, among others. The time has come, we canwait no more. Even global warming may no longer be such a faithful ally,what with recent studies showing it may have even slowed. Does thismean climate change skeptics and euroskeptics are waging the samewar? Whatever, roll on springtime… 2014!_Ludovic_Subran

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Economic Outlook no. 1193 | March 2013 | Macroeconomic, Risk and Insolvency Outlook Euler Hermes

Editorial

The European Winter

World business cycle indicators

-60-50-40-30-20-10

0102030405060

30

35

40

45

50

55

60

65

70Industrial confidence index (right axis)Investor confidence index (left axis)

13121110090807060504

Sources: Markit, Sentix, Euler Hermes

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Economic Outlook no. 1193 | March 2013 | Macroeconomic, Risk and Insolvency Outlook

"sequester" is indeed under way (USD 85billion in automatic cuts since thebeginning of March), its effect remainssmall relative to the shock of the fiscalcliff (expiring tax exemptions, auto-matic budget cuts in the absence ofagreement on the 2013 budget). The for-mer is in fact estimated to shave -0.6 ppof GDP, as opposed to -2 pps in the caseof the fiscal cliff.

(ii) Within the euro zone, progress hasbeen made towards resolving the cri-sis. The Troika gave a favorable assess-ment of Greece, Portugal and Irelandand budgetary targets for the comingyears have been relaxed. The principleaccording to which a country that failsto meet its targets because of a cyclicalshock will not be punished appears ontrack to be adopted. Monetary policyremains expansionary and the ECB isfirmly committed to supportinggrowth and the troubled countries(OMT) in the region. The bankingunion plan is on the right track, in par-ticular the agreement on a singlesupervisory mechanism for theregion's banks under the ECB surveil-lance.

(iii) Policy changes have improvedJapan’s growth outlook. The ShinzoAbe government has put in place a pro-

>

Australia 2.4% 2.1% 0.3%Norway 2.2% 3.2% -0.9%Canada 1.9% 2.1% -0.1%USA 1.8% 1.7% 0.0%Sweden 1.2% 0.9% 0.3%Switzerland 1.1% 1.2% 0.0%Ireland 1.1% -0.2% 1.3%Japan 1.0% 1.3% -0.3%UK 0.7% 0.6% 0.1%Germany 0.7% 0.7% -0.1%Denmark 0.5% 1.1% -0.5%Austria 0.4% 0.2% 0.1%Finland 0.2% -0.5% 0.6%Belgium 0.1% -0.3% 0.4%Netherlands 0.1% -0.2% 0.3%France 0.1% -0.3% 0.4%Italy -1.2% -2.2% 1.0%Spain -1.5% -4.8% 3.4%Portugal -2.2% -4.0% 1.8%Greece -4.1% -6.3% 2.1%

Contribution to 2013 GDP growth*

Sources: IHS Global Insight, Euler Hermes forecasts* yearly average

GDP Domestic Net tradedemand contribution

Overall, the financial climate improvedbetween late 2012 and early 2013.Indicators of financial stress haveimproved since the second half of 2012 onthe back of four factors in particular: thedeclining risk of a drastic adjustment in USpublic finances following the deal in late2012 on the fiscal cliff, progress on theEuropean crisis front, an improvedeconomic outlook for Japan and better-than-expected performances fromemerging countries, notably China.

Financial tensions have globally easedsince late 2012. Overall risk aversion,as measured by the VIX index, hasdecreased by 50% since December2012. Pressures on eurozone sovereigndebts have also reduced. The 10-yearyield spread between Greek govern-ment bonds and German bund fellbelow 1,000 bps in January 2012, for thefirst time in two years. Italian andSpanish rates have also eased signifi-cantly (more than 200 bps since peak-ing in July 2012).

This trend is due to the fact that (i) therisk of a drastic adjustment in US pub-lic finances has decreased followingthe final-hour compromise struck latein the year and the ongoing negotia-tions pointing to smaller budget cutsthan previously envisaged. While the

= +

Financial tensions eased between late 2012 and early 2013 on the back of improving outlook for the United States and Japan at end-2012linked in the former to the lower than expected fiscal cliff and, in the latter, the introduction of more pro-growth monetary and fiscalpolicies. In addition, the eurozone sovereign crisis receded and emerging countries were much more resilient than expected. Nevertheless, Q12013 economic data continues to point to weak activity, largely due to the ongoing decline in production in the eurozone. Thus, global growthis expected to average +2.4% for the second consecutive year in 2013, undermined by persistently downbeat prospects in the eurozone, whilethe rest of the world is showing signs of resilience more than strong performances. In 2014, global growth should accelerate moderately to+3.2% on the back of an upturn in activity thanks to an economic recovery in the eurozone and more rapid growth in global trade. However,risks to our economic scenario remain skewed to the downside. In the short term, the risks are (i) political (particularly heavy political calendarin the eurozone) and geopolitical (in particular the intensification of the North Korean-South Korean conflict), and (ii) related to thesustainability of public debts in the eurozone. Last, in structural terms and looking further out, the risks are concentrated in macroeconomicfundamentals, where frailties have accentuated in both developed and emerging countries.

Overview

Europe: still looking for a second wind

5


Sources: IMF, IHS Global Insight, Euler Hermes forecasts

Annual average contribution to world growth, in %

World 100 2.9 2.4 2.4 3.2Advanced economies 63 1.5 1.3 1.1 2.0Emerging economies 37 6.1 5.0 5.1 5.6North America 25 1.9 2.2 1.8 2.7United States 22 1.8 2.2 1.8 2.7Canada 3 2.6 1.8 1.9 2.5Western Europe 23 1.5 -0.3 0.0 1.3United Kingdom 3 0.9 0.2 0.7 1.2Sweden 1 3.8 1.2 1.2 2.2o. w. Eurozone members 17 1.5 -0.5 -0.3 1.2Germany 5 3.1 0.9 0.7 1.9France 4 1.7 0.0 0.1 0.9Italy 3 0.6 -2.4 -1.2 0.7Spain 2 0.4 -1.4 -1.5 0.7Netherlands 1 1.1 -0.9 -0.5 1.0Ireland 0 1.4 0.7 1.1 1.9Portugal 0 -1.6 -3.2 -2.2 0.5Greece 0 -7.1 -6.4 -4.1 -0.5Central and Eastern Europe 6 4.7 2.1 2.9 3.4Russia 3 4.3 3.4 3.8 4.0Turkey 1 8.5 2.2 4.0 4.0Poland 1 4.3 2.0 1.7 2.7Latin America 8 4.2 2.6 3.3 3.8Brazil 3 2.7 0.9 3.0 3.8Mexico 2 3.9 3.8 3.5 3.9Asia 29 4.8 4.8 4.9 5.1China 12 9.3 7.8 8.0 8.2Japan 8 -0.5 1.9 1.0 0.9India 3 6.9 5.0 6.5 7.0Oceania 2 2.3 3.2 2.1 2.8Australia 2 2.4 3.6 2.4 3.1Middle East 4 4.6 2.6 2.3 4.0Africa 2 0.4 5.6 4.6 4.8

GDP share* 2011 2012 2013 2014

0

1

2

3

4

5

Emerging countriesAdvanced countries

14131211100908070605040302010099

5

4

3

2

1

0

-1

-2

-3

forecasts

World economic growth World trade in goods and services

-15

-10

-5

0

5

10

15

1413121110090807060504030201009998

forecasts

4.86.3

12.1

0

2.9

5.1

10.4

7.4

9.2

7.2

2.6

-11.8

14

6

3.6

6.2

3.3

yearly change, in %

Sources: national statistics, IHS Global Insight, Euler Hermes forecasts

Australia

Canada

Sweden

Switzerland

Norway

United States

Germany

Austria

Belgium

France

Japan

Eurozone

United Kingdom

Netherlands

Finland

Denmark

Ireland

Spain

Italy

Portugal

Greece -17.7%

-8.2%

-8.1%

-6.5%

-6.1%

-4.6%

-4.5%

-3.2%

-3.0%

-3.0%

-2.6%

-1.1%

0.4%

1.0%

1.4%

2.9%

3.4%

4.7%

5.3%

5.5%

11.9%

GDP growth


Q4 2012 compared to Q1 2008

Sources: IMF, IHS Global Insight, Euler Hermes forecasts, in % * 2012 GDP weighing at current exchange rates forecasts

Economic forecasts

6


Inflation*


2012 2013f 2014f

Greece 1.0% -0.6% -0.2%Switzerland -0.7% -0.2% 0.4%Japan 0.0% 0.3% 1.6%Sweden 0.9% 0.5% 1.8%Portugal 2.8% 1.1% 1.3%Ireland 1.9% 1.3% 1.5%Norway 0.8% 1.4% 1.8%Canada 1.4% 1.4% 2.1%United States 2.0% 1.7% 2.1%France 2.0% 1.6% 1.8%Italy 3.0% 1.6% 2.1%Spain 2.4% 1.6% 1.3%Denmark 2.4% 1.7% 1.9%Belgium 2.6% 1.8% 2.0%Germany 2.0% 1.8% 2.0%Eurozone 2.5% 1.9% 1.9%Austria 2.5% 2.1% 2.2%Finland 2.7% 2.2% 2.1%Netherlands 2.8% 2.2% 1.8%Australia 1.8% 2.3% 2.5%United Kingdom 2.7% 2.5% 2.1%

growth policy mix. The central bankinflation target has been lifted from 1%to 2%. The Bank of Japan has spoken infavor of a more aggressive expansion-ary monetary policy in order to kick-start growth (monthly asset purchasesamounting to 1.3% of GDP in order todouble the monetary base by 2015),drive down the yen and break out of thedeflationary cycle that has gripped thecountry. This position could soon bestrengthened further, with the appoint-ment of a new governor, HaruhikoKuroda, in favor of a more accommo-dating policy. In addition to this mone-tary policy, new fiscal stimulus meas-ures have been announced (JPY 13,100billion, i.e. the second largest packagein the Japanese history).

(iv) Emerging countries have shownresilience. Economic growth among theBRICs (Brazil, Russia, India and China)accelerated to +6.1% y/y on average in Q42012, compared to +5.3% y/y in the previ-ous quarter. This performance resultedin large part from an improvement ineconomic activity in China (+7.8% y/y)and India (+8.9%), both performancesbeing bolstered by past and ongoingexpansionary monetary policies.

Nevertheless, the economic recovery isstruggling to gain traction, with expectedgrowth of +2.4% for the secondconsecutive year in 2013 and +3.2% in2014. Despite financial tensions havingeased, leading indicators continue topoint to weak activity and persistentregional disparities in 2013. The globaleconomy is forecast to grow by +2.4%,driven by emerging countries (+3.6%),the United States (+1.8%) and Japan(+1.0%), while the eurozone is expectedto remain in recession (-0.3%). Globalactivity should then start to stabilize in late2013 and pick up more strongly in 2014on the back of a rebound in global trade,the main growth drivers being the UnitedStates (+2.7%) and emerging countries(+5.6%), with moderate growth in theeurozone (+1.2%).

The first available indicators for 2013are unsatisfactory. While global

growth in Q4 2012 came in at +0.6% q/q(2012 annual average at +2.4% thesame as in 2011), economic indicatorsin early 2013 tend to confirm a still-weakened global trend. Global indus-trial production in the month ofJanuary grew +1.1% compared to theprevious three months (vs. +2.0% onaverage since the end of the crisis),underpinned by vigorous productionin emerging countries (+2.1% com-pared to the previous three months)and the recovery in the United States(+1.6% compared to the previous threemonths), albeit still undermined bythe eurozone (-1.4% compared to theprevious three months).

Global growth is expected to stabilizeat +2.4% in 2013 before acceleratingto +3.2% in 2014. In early 2013, indus-trial confidence points to a slightimprovement in global activityprospects thanks to positive trends inthe United States, Japan and China.The eurozone continues to weigh onthe global economy. Activity prospectsin the region remain mixed, with lead-ing indicators still weak in the maincountries. Nevertheless, subsidingrisks and institutional progress sinceSeptember 2012 should pave the wayfor a gradual stabilization of globaleconomic activity during 2013, proba-bly in the second half of the year(+2.4%), and a more pronouncedupturn in 2014 (+3.2%). The increase inglobal demand should bolster globaltrade (+6.2% in 2014 after +3.6% in2013).

In 2013, the eurozone will be mired inrecession for the second consecutiveyear (-0.3%) before returning to thegrowth track in 2014 (+1.2%). Thissecond year of recession in 2013should prove to be more pronouncedthan previously expected ( 0.2 pp com-pared with December 2012 at -0.3%),with a slowdown in economic activityin Germany (+0.7% vs. +0.9% in 2012)and near-zero growth once again inFrance (+0.1% vs. 0% in 2012).Economic activity in the SouthernEuropean countries is likely to remain

>

>

Unemployment rate*


2012 2013f 2014f

Spain 24.9% 26.4% 25.8%Greece 24.3% 26.3% 26.0%Portugal 15.9% 18.3% 18.2%Ireland 14.7% 14.5% 14.1%Eurozone 11.5% 12.2% 12.5%Italy 10.6% 11.2% 11.0%France 10.2% 10.9% 11.0%USA 8.1% 7.8% 7.2%Sweden 8.0% 8.3% 8.0%UK 8.0% 8.0% 7.8%Finland 7.7% 8.0% 7.8%Denmark 7.7% 7.6% 7.5%Belgium 7.3% 7.7% 7.7%Canada 7.3% 7.3% 7.1%Germany 6.5% 6.7% 6.6%Netherlands 6.4% 7.0% 7.0%Australia 5.2% 5.4% 5.1%Austria 4.4% 4.6% 4.4%Japan 4.3% 4.3% 4.1%Norway 3.2% 3.2% 3.0%Switzerland 2.8% 2.9% 2.9%

7


Industrial production

50

100

150

200

250 Emerging countries

Eurozone

Japan

United States

Advanced countries

World

1312111009080706050403020100

Basis 2000=100

Source: CPB

Public debt

2013f (shown)

2012Australia

Norway

Switzerland

Sweden

Denmark

Finland

Netherlands

Austria

Germany

Canada

United Kingdom

France

Spain

Belgium

United States

Ireland

Portugal

Italy

Greece

Japan215.2

175.8

129.0

125.2

121.0

108.5

100.2

96.7

94.2

93.5

89.6

80.3

75.3

72.6

52.3

47.6

38.8

34.3

31.2

27.2


% of GDP


Exchange rates

60

70

80

90

100

110

120

130

United Kingdom

JapanUnited StatesEurozone

12111009080706050403020100

real effective exchange rate, basis 100=Q1 2000

Sources: national statistics, IHS Global Insight

2013f (shown)

2012Japan

Ireland

United Kingdom

Spain

United States

Portugal

Greece

France

Canada

Netherlands

Belgium

Austria

Denmark

Italy

Finland

Australia

Sweden

Germany

Switzerland

Norway13.1

0.3

0.2

-0.5

-1.0

-1.0

-2.3

-2.4

-2.7

-3.0

-3.0

-3.0

-3.8

-4.7

-5.5

-6.4

-6.6

-7.3

-7.6

-11.6

Fiscal balance% of GDP

-4

-2

0

2

4

6

8

102013f2012

Neth

erla

nds

Germ

any

Aust

ria

Irela

nd

Japa

n

Spai

n

Italy

Belg

ium

Port

ugal

Fran

ce

Gree

ce

Unite

d Ki

ngdo

m

Unite

d St

ates

Current account balance

Sources: IHS Global Insight, Euler Hermes forecasts

% of GDP

25

30

35

40

45

50

55

60

65

Emerging countries

Advanced countries

United States

JapanEurozone

1312111009080706050403020100

Industrial confidence index

Sources: Markit, Bloomberg, Euler Hermes

Manufacturing PMI

8


2014) could erode the confidence ofinvestors as to its sustainability,thereby leading the country's leaders toexercise more vigilance in managingthe country's public finances.

Growth in emerging countries is set toremain robust (+5.1% in 2013 and+5.6% in 2014). In emerging countries,the monetary easing measures intro-duced in 2011-2012 should continue tobear fruit. Economic activity is likely togradually pick up in China (+8.0% in2013 and +8.2% in 2014) although willremain below its pre-crisis level due toexcess production capacity and thepossibility of nascent inflationary pres-sures. Activity is likely to gather pace inBrazil (+3.0% and +3.8% in 2013-2014),driven by the expansionary measuresin place since 2011. India will also ben-efit from an improvement in growth in2013-2014 (+6.5% and +7.0%), the paceof which will nevertheless remainbelow its pre-crisis level (+8%). Last,Russia will continue to post satisfac-tory growth (+3.8% in 2013 and +4.0%in 2014) on the back of persistentlyhigh oil prices and buoyant domesticdemand. After headwinds almosthalved the growth rate in 2012, eco-nomic activity in eastern Europeancountries will gradually pick up in 2013and 2014 (+2.9% and +3.4%, respec-tively), lower inflation making it possi-ble to conduct accommodating mone-tary policies while progress has beenmade in terms of budgetary consolida-tion among the region's countries.

The resurgence of stress in the eurozonelinked to delays in the pace of reform(budgetary, institutional) and the politicalstability will remain the primary factors ofvulnerability in the short term. Structuralweaknesses will continue to fuelmacroeconomic risk in the medium term,limiting the extent of the economicrecovery in the coming years.

On a more global level, political riskremains high and constitutes a stressfactor that could weigh on the eco-nomic recovery. In the United States,the cut-off date for an agreement on

at low levels, undermined by the ongo-ing austerity measures and private-sector deleveraging. An improvementin financial conditions and credit, therelaxation of the budgetary adjust-ment processes and the reduction ofexternal imbalances should pave theway for modest GDP growth in theeurozone in 2014 (+1.2%).

US growth will remain modest in 2013(+1.8%), but will pick up morestrongly in 2014 (+2.7%). In the UnitedStates, economic activity has contin-ued to surprise on the upside since thestart of 2013, with the continuingimprovement in the housing market,rising asset prices and resilient domes-tic demand. The good performance bythe manufacturing sector led to abright patch in the labor market ,which should sustain a gradual declinein the unemployment rate (-0.3 pp to7.8% in 2013 and 7.2% in 2014).However, the automatic public spend-ing cuts (USD 85 billion) in 2013 areexpected to weigh on private con-sumption. Moreover, the risk of failureto resolve the debt ceiling dispute islikely to weigh on investor confidencein H1 2013, capping economic growthto +1.8% in 2013 (after +2.2% in 2012).Thereafter, the reduced pace of thebudgetary adjustment and the contin-uation of quantitative easing measuresin 2014 should pave the way for a morepronounced upturn in activity in 2014(+2.7%).

Economic growth is expected toremain moderate in Japan (+1.0% in2013 and +0.9% in 2014). The depreci-ation of the yen (-20% since December2012) and the strengthening of mone-tary and fiscal stimuli should bolstereconomic activity in the short term. Inaddition, more monetary easing meas-ures are likely to be announced in thecoming months. Nevertheless, growthwill remain modest in 2013 and 2014(+1.0% and +0.9%, respectively) insofaras a certain budgetary rehabilitation isprobable in the medium to long term.Japan's mounting public debt(expected to reach 220% of GDP in

the debt ceiling has been postponed to19 May 2013, while a technical defaultis a possibility for July or August shouldno solution be found. Against thisbackdrop, investor confidence mayremain under pressure and investmentcould take longer to pick up than ini-tially expected. In the case of the euro-zone, the political calendar remainsbusy and potentially destabilizing,with the worrying political situation inItaly following the recent elections andthe coming legislative elections inGermany in September. Social tensionsdue to the ongoing rise in the unem-ployment rate could weigh on politicalstability in some countries (Italy,Spain, Greece, Cyprus). On the global(geo-) political front, renewed tensionsbetween North Korea and South Koreaare undoubtedly the main risk in theshort term, given the formidable con-sequences (human, social, politicaland economic) at stake in particular inthe event of war. In addition, electionsare scheduled to take place in Iran inJune 2013 and there is ongoing conflictin Africa, which could have destabiliz-ing effects on the global productioncycle (effect on the oil supply chainand oil prices).

Risks overhanging the sustainabilityof public debts remain high, in partic-ular in the eurozone in light of thefragility of the institutional frame-work.

(i) The European Commission shouldsee its role strengthened, but the riskof fiscal slippage remains significantdue to high refinancing needs. In theeurozone, new budgetary targets willbe decided by the EuropeanCommission in April-May 2013. In thisenvironment, France and Spain shouldbenefit from an easing of their fiscaltargets: the return to a fiscal deficit of-3% of GDP is expected to be pushedback one year. In addition, thestrengthening of the powers of theEuropean Commission, now able toreject draft national budgets, shoulddecrease the risks of failure to meet fiscal adjustment targets and speed up

>

9

Sovereign interest rates (10 years)


Index of financial markets volatility (VIX)

0

20

40

60

80

100

13121110090807

Lehman Brothersbankruptcy

Greekcrisis

Bailout ofIrish banks

Italianbanks

Greek debtrestructuring

Spanishbanking

crisisUS Fiscal

cliff Italian

political crisisand

Cyprus bailout

Sources: Bloomberg, Euler Hermes

Commodities prices

0

20

40

60

80

100

120

140

160

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000Gold prices (USD) Right axisBrent prices (USD/barrel) Left axis

131211100908


Sources: Bank of France, Euler Hermes

0

1

2

3

4

5

6

7

8Japan

Spain

Italy

GermanyFrance

United KingdomUnited States

13121110090807

in %


Spai

n

Unite

d Ki

ngdo

m

Unite

d St

ates

Japa

n

Euro

zone

Fran

ce

Italy

Germ

any

102

123 123132

152159

182 186

Private sector total debt (excl. non-financial institutions)% of GDP, Q3 2012

-15

-12

-9

-6

-3

0

3EurozoneUnited States

13121110090807

Financial conditions index*

* The index is based on money market data, bond market dataand equity market dataSources: Bloomberg, Euler Hermes

Sources: IHS Global Insight, Euler Hermes

0

1

2

3

4

5

6

7

801/2013

Min reached since 01/2007

01/2007

Indi

a

Chin

a

Cana

da

Aust

ralia

Euro

zone

Unite

d in

gdom

Unite

d St

ates

Japa

n

Monetary policy ratesin %

10


press ahead with meaningful financialintegration. The risk of a weakening of globaldemand is high given persistent struc-tural frailties. Dynamics of global pro-duction remain weak, and prospects ofgrowth rates returning to levels as vig-orous as during the last decade remainunlikely. First of all, global demand isbeset by weakened private sector indeveloped countries. With the excep-tion of Japan (in the short term), publicsectors continue to be committed toimplement austerity measures. Thelabor market remains depressed inEurope in particular, where unemploy-ment has reached record levels formany countries, most notably those inthe eurozone periphery. Companiesare adopting increasingly cautiousbehavior, reflected by national data inan investment cycle that is strugglingto pick up in any significant way, butalso in business surveys, which pointto persistently weak confidence levels.Global trade continues to be weigheddown by prevailing sluggish globaldemand and still-high commodityprices, in particular in the eurozone.These factors remain all the morepenalizing for the eurozone alreadyhurt by a lack of competitiveness, inpart linked to the strength of the euro.This weakness on the part of globaltrade is accentuated by the lack of anymarked upswing in demand in emerg-ing countries. While demand in thesecountries has so far been resilient, onlya modest acceleration is expected inthe medium term. On the one hand,China is likely to enter into a moderategrowth cycle (average growth of 8%over the coming years compared with10% over the last decade) given itschange of economic model, havingswitched from export-driven growth toa model led more by domestic demandand sectors less linked to global trade.On the other hand, growth will also belimited within the other large emerg-ing countries (Russia, India, China),with domestic engines of growth beingheld back by uncertainties surround-ing global demand and macroeco-nomic policies that are tending to

the structural reforms in these coun-tries. Despite the loosening of budgetary targets in the case ofPortugal (-5.5% of GDP in 2013, -4.0% in2014 and -2.5% in 2015, compared with-4.5%, -2.5% and -2.0% previously), refi-nancing needs not covered by theTroika's program remain high (EUR 13billion in 2013, i.e. 8% of GDP), whichcould require additional Europeansupport upon the country's partialreturn to the markets in September2013 (e.g. ESM purchases of Portuguesebonds). The European Summit on 27-28 June should shed more light onthe role of the ESM (lending capacity ofEUR 500 billion by early 2014) in therecapitalization of the banks. In fact,without ESM assistance, Portugal(EUR 12 billion in aid to its banks) andIreland (EUR 39 billion in aid to itsbanks) could struggle to pull out of theTroika's programs. This situation alsoconcerns Spain, the bailout of its banks(EUR 40 billion) is slowing the budget-ary adjustment, and the debt is likely toreach 100% of GDP in 2014. In additionto questions overhanging the budget-ary consolidation process, attentionwill turn to Italy in light of its currentpolitical instability. The government'srefinancing needs remain very highthis year (EUR 300 billion, i.e. 20% ofGDP), which could give rise to a freshbout of tension on the market, particu-larly if structural reforms are delayed.

(ii) The process of financial integra-tion is under way, but its efficiencycould be challenged. The bankingunion is taking shape, with the agree-ment on the Single SupervisoryMechanism (SSM) in March 2013 beingthe first step in this direction. However,the implementation of the two follow-ing steps − a single bank resolutionfund and a single bank deposit guaran-tee fund − will provide the real founda-tion for the banking union. This matteris scheduled to be addressed at theEuropean Summit in late June 2013,and is all the more crucial as theCypriot crisis has stoked fresh fearsamong investors with regard to thewillingness of European leaders to

become more prudent (budgetary pru-dence in order to prevent targets fromdrifting out of reach, monetary pru-dence in the face of inflationaryrisks)._AB/MI

-20

-15

-10

-5

0

5

10

15

20

25

30

35

Eurozone

FranceItaly

Germany

Spain

13121110090807060504

Credit to non financial corporations


yoy, %

>

11


0

30

60

90

120

150 Historical averageGlobal insolvency index

14131109070503019997

forecasts

Sources: national statistics, Euler Hermes forecasts

Global insolvency indexBasis 2000=100

Global insolvency indexAnnual change

Sources: national statistics, Euler Hermes calculation and forecasts, Basis 100=2000 * GDP 2011 weighing at current exchange rates

Statistics by country

forecasts

% of world % of global2011 2012 2013 2014

GDP* insolvency index*

forecastsSources: national statistics, Euler Hermes forecasts* GDP 2011 weighting at current exchange rates

% of world % of global 2012 forecastsGDP* insolvency index* Total Change 2013 2014

Global Insolvency Index 84.1 100 -4% 1% 8% 2%Americas Index 28.8 34.2% -15% -15% -6% -5%Asia-Pacific Index 25.0 29.7% -6% -5% 1% 2%Northern Europe Index 13.0 15.5% -2% 5% 1% -3%Germany-Austria-Switzerland Index 6.9 8.2% -5% -5% 1% -2%France Index 4.1 4.9% 0% 2% 2% -1%Mediterranean countries Index 6.3 7.5% 18% 28% 33% 12%Eurozone Index 19.2 22.8% 8% 16% 21% 7%

United States 22.51 26.8 40,075 -16 -7 -6 China 10.88 12.9 2,626 -14 4 3 Japan 8.75 10.4 12,124 -5 -3 3 Germany 5.32 6.3 28,297 -6 1 -2 France 4.14 4.9 60,958 2 2 -1 Brazil 3.69 4.4 1,495 26 20 0 United Kingdom 3.61 4.3 29,940 -8 -7 -6 Italy 3.28 3.9 12,442 2 7 0 Russia 2.77 3.3 14,072 10 2 -3 Canada 2.59 3.1 3,236 -11 -4 -3 Spain 2.22 2.6 7,799 32 40 15 Australia 2.21 2.6 10,632 1 3 2 South Korea 1.66 2.0 1,228 -10 1 -2 Netherlands 1.25 1.5 8,616 21 7 -1 Switzerland 0.95 1.1 4,534 -3 -3 -4 Sweden 0.80 1.0 7,471 7 10 3 Poland 0.77 0.9 941 29 10 2 Belgium 0.77 0.9 10,587 4 11 2 Norway 0.72 0.9 3,814 -12 -3 -6 Taiwan 0.70 0.8 260 2 6 4 Austria 0.62 0.7 6,041 3 4 0 Denmark 0.50 0.6 5,456 0 3 -3 Greece 0.45 0.5 1,400 30 10 3 Finland 0.40 0.5 3,471 1 3 -2 Singapour 0.39 0.5 151 34 1 -3 Hong Kong 0.36 0.4 312 -6 3 -2 Portugal 0.35 0.4 6,727 42 9 1 Ireland 0.32 0.4 1,684 3 -3 -8 Czech Republic 0.32 0.4 3,764 46 10 10 Roumania 0.28 0.3 29,769 31 -3 -14 Hungary 0.21 0.2 22,389 13 4 -4 Slovak Republc 0.14 0.2 1,050 6 5 4 Lithuania 0.06 0.1 1,339 5 5 -5 Luxembourg 0.05 0.1 1,053 8 0 -5

-3

-2

-1

0

1

2

3

4

5

World GDP (left axis)Global insolvency index(right axis, descending values)

14131211100908070605040302010040

30

20

10

0

-10

-20forecasts

Sources: national statistics, Euler Hermes calculationand forecasts

Insolvency and world GDP

Annual change in %

0

100

200

300

400

500

600

700

800

France Index

Germany-Austria-Switzerland Index

Northern European Countries Index

Mediterraneen Countries Index

Americas Index

Asia-Pacific Index

141312111009080706050403020100

forecasts

Sources: national statistics, Euler Hermes calculationand forecasts

Global insolvency index by regionBase 100=2000

12


Three countries with a changed country risk level(CRL) in the 1st quarter – two in a better directionand one in a worse

Cyprus

Changesas of March 26, 2013

Estonia

Ghana

2 Medium risk3 Sensitive risk4 High risk

Low risk1

ource: Euler Hermes, as of March 26, 2013

Latest changesin country risks

Estonia to Low from Medium.The economy has rebounded stronglysince 2008-9 and shown resilience tothe Eurozone crisis, growing by anannual average 5% in 2010-2012.Macroeconomic fundamentals havestrengthened markedly and GDP isapproaching the pre-crisis level.

Ghana to Low from Sensitive.Ghana has a record of domestic stabi-lity and smooth political transitions. Arich natural resource base (gold, cocoa,forestry) was supplemented from 2011by exploitation of oil reserves, whichhas spurred rapid GDP growth. Whilefiscal and current accounts still regis-ter deficits, external debt ratios andservicing are low.

Cyprus to High from Sensitive.Following the “bail-out” agreed withthe Eurozone and IMF, recession islikely to deepen and be of uncertainlength, particularly in the context ofbanking sector restructuring andcontrols. Implementation of theadjustment programme will be chal-lenging, testing government resolve.Debt sustainability is finelybalanced._DA

13

Euler HermesBulletin économique N° 1193 | Conjoncture, risques économiques et défaillances | Mars 2013

EnAmérique latine, la croissance régionaledevrait légèrement se redresser en 2013 pouratteindre+3,3% puis +3,8% en 2014, aprèss'être établie à+2,6% en 2012. L’embellieattendue pour 2013 sera cependant largementattribuable au Brésil qui, avec l'Argentine, avait contribué auralentissement de la croissance régionale en 2012. Plusieurs autresgrandes économies devraient décélérer en 2013, en raison des effets debase liés à une forte croissance en début 2012. Néanmoins, leur tendancesous-jacente demeure relativement solide, soutenue par des politiqueséconomiques saines. Toutefois, l’Argentine devrait continuer d'enregistrerune croissancemodeste et le Venezuela évolue dans un climat d’incertitudepolitique alors que le stimulus apporté à la croissance durant la période électoralede 2012 devrait progressivement s'estomper.L’activité au Brésil amontré des signes de reprise au T4 2012 ; la croissancedevrait se redresser en 2013 et 2014 (pour atteindre respectivement+3,0% et +3,8%,contre+0,9% en 2012). La croissance auMexique devrait conserver son élan, tirée par lesexportations à destination des États-Unis et le nouveau gouvernement devraitpoursuivre les réformes structurelles, y compris dans le secteur énergétique. AuChili(+4,5%), enColombie (+3,8%) et au Pérou (+6,0%), la croissance sera plus faible sur l’ensemblede l’année 2013 qu’en 2012,mais devrait continuer de se renforcer en glissement trimestriel etdemeurer relativement solide. D'unpoint de vue systémique, le Brésil, leMexique, le Chili, laColombie et le Péroudemeurent bien armés pour résister à toute évolution défavorable de lademandemondiale, des prix desmatières premières et des flux de capitaux à court terme. Ilsparviennent àmaintenir un juste équilibre entre la nécessité de stimuler leur économiedomestique et de contrôler l’inflation. L’économie argentine a fortement ralenti en 2012 etmalgré quelques signes de reprise, les restrictions imposées sur les importations pourmaintenir les niveaux de réserves de change et l’incertitude entourant les décisionsjudiciaires sur le paiement des créanciers récalcitrants (“hold-outs”) lors de l’accordd’échange de dette de 2010 pèseront sur la croissance en 2013 (elle ne devrait guère dépasser+2,0%). AuVenezuela, NicolasMaduro, le successeur choisi parChavez, a remporté les électionsprésidentielles organisées enavril,mais il aura sans doute dumal à exercer lamême influenceque sonprédécesseur sur lesplans national et régional.L’Argentine et le Venezuelaauront dumal à afficher unecroissance forte et durable s’ilsnemodifient pas leur politiqueéconomique. Des électionsprésidentielles et législativesauront également lieu en avril auParaguay. En Équateur, RafaelCorrea, le président issu de lagauche radicale, a été rééluconfortablement lors desélections de février._DA

Les Amériques

584 5707 9776198 2425 12225116 1163 1001241 475 1154748 365 768430 338 1130717 268 1539830 200 673615 71 476510 59 580715 50 33233 50 146595 45 93634 35 9605

10 27 26107 26 39046 24 38291 24 176088 18 22983 15 55270 8 23483

10 8 8116 8 13150 5 16512

faiblefaibleélevéfaibleélevéfaiblefaibleélevé

significatiffaiblefaiblefaiblefaibleélevéfaible

modérésignificatifsignificatif

élevéfaibleélevéélevé

significatif

* Note au 26/03/2013 (voirméthodologie page 20) **(1) en 2012, enmillions **(2) en 2012, enmillions USD **(3) en 2012, en $ Sources : FMI, Euler Hermes

faiblefaible

États-Unis

Canada

Mexique

GuatemalaSalvador

Costa RicaTrinité et Tobago

Surinam

République dominicaine

Porto RicoJamaïque

HaïtiCuba

BélizeHonduras

Nicaragua

Panama

Brésil

Argentine

Barbade

Colombie

Chili

Bolivie

Vénézuela Guyana

Guyane française

Paraguay

Équateur

Uruguay

Pérou

GuadeloupeMartinique

Niveau de risque*

Amérique du NordÉtats UnisCanada

Amérique latineBrésilMexiqueArgentineColombieVenezuelaChiliPérouÉquateurRépublique dominicaineGuatemalaUruguayCosta RicaPanamaBolivieSalvadorTrinité-et-TobagoParaguayHondurasJamaïqueBahamasHaïtiNicaraguaBarbade

Population**(1) PIB**(2) PIB/TÊTE **(3)

349 17424 4986315 15653 4975935 1770 50825

Regional GDP growth is forecast at +3.1% in 2013, with animprovement to +4.3% in 2014. At a country level there will bea marked variance in annual average GDP growth, with ratesabove +7% in 2013-14 forecast for Angola, Ethiopia, Ghana andMozambique and above +5% for Kenya, Nigeria, Tanzania and Uganda.In Sub-Saharan Africa, recent events in Mali (French and ECOWAS troopsprevented a potential takeover of the country by Islamist rebels) and theCentral African Republic (a coup in March) indicate that improvedgovernance seen elsewhere in the region is not all-embracing. In Kenya,however, elections in March were relatively peaceful and the transfer ofpower to President-elect Uhuru Kenyatta may engender a more stableenvironment in East Africa’s major economy. In South Africa, where JacobZuma was re-elected president of the ANC, GDP growth was +2.5% in 2012and structural rigidities will limit expansion to +3% in 2013 and+3.5% in 2014. Key risks in theregion include the potential forfurther unscheduled politicalchange and for a collapse indemand for commodities.In MENA, the politicaltransitions in North Africaremain fragile, civil war in Syriais ongoing with the potential tospread to neighbouring statesand periodic terrorist activityremains evident (as in thetemporary siege in Algeria’s InAmenas gasfield). Other keyrisks include relations betweenIran (presidential elections thisyear) and Israel (PM Netanyahure-elected in January) and acollapse in oil prices, whichwould limit the capacity of majorenergy exporters to act as theregion’s financier._AA

14


Africa andMiddle East Algeria

Tanzania

MauritaniaMali Niger

Syria

Iraq

Libya Egypt

SudanChad

Guinea

EthiopieNigeria

Central AfricanRep.

DemocraticRepublicof Congo

KenyaSomalia

Namibia

Botswana

SouthAfrica

Côted'Ivoire

Iran

Angola

Zambia

Cameroon

Gabon

Mozambique

Zimbabwe

Morocco

SaudiArabia

Yemen

Jordan

Oman

Uganda

Burkina Faso

Senegal

Tunisia

GambiaGuinea Bissau

Sierra Leone

LiberiaGhana

TogoBenin

Equatorial Guinea

Congo

Erithrea

Qatar

U.A.E

Kuwait

LebanonIsrael

Malawi

Lesotho

Swaziland

BurundiRwanda

Djibouti

Cap Vert

Sao Tome and Principe

Seychelles

Mauritius

Ile de la Réunion

Madagascar

SouthSudan

Morocco

Country Risk Level*North AfricaEgyptAlgeriaMoroccoLibyaTunisia

Middle EastSaudi ArabiaIranUnited Arab EmiratesIsraelQatarKuwaitIraqOmanSyriaLebanonYemenJordanBahrain

220 2515 11,42129 657 22,89076 484 6,398

8 362 44,6488 247 32,0722 185 101,9163 175 60,392

34 131 3,8743 80 27,539

21 60 2,8394 42 9,732

26 36 1,4226 31 4,8551 27 19,499

170 689 4,061 84 255 3,03736 207 5,66133 97 2,981

6 85 14,66111 45 4,176

Population**(1) GDP**()2) GDP per capita**(3)

high sensitive medium

highsensitive

low high low low low low high low high high high low

sensitive

Sub-Saharan AfricaSouth AfricaNigeriaAngolaSudanEthiopiaKenyaGhanaTanzaniaCameroonCôte d'IvoireZambiaEquatorial GuineaUgandaDemocratic Republic of CongoBotswanaGabonMozambiqueSenegalCongo (People's Republic Of)NamibiaMauritiusZimbabweBurkina FasoMadagascarChadMaliBeninRwandaNigerGuinea (Rep Of)MalawiMauritaniaSwazilandTogoEritrea

low high

sensitive high high high low

sensitive sensitive

high sensitive

high sensitive

high low

sensitive sensitive sensitive

high low low high

sensitive high high high

sensitive high high high high high

sensitive high high

837 1307 1,56150 391 7,784

154 273 1,77118 115 6,40546 52 1,12887 42 48442 42 98726 40 1,57147 28 59218 25 1,34020 24 1,20614 21 1,494

1 21 28,33936 20 57569 18 255

2 18 8,5672 17 10,889

24 15 59813 14 1,065

4 14 3,2782 12 5,1371 12 9,081

13 11 83017 10 58822 10 45812 10 82216 10 590

9 8 80711 7 61717 7 39410 6 55216 4 283

4 4 1,1301 4 2,9926 4 5776 3 557

* as of March 26, 2013 (see methodology page 20) **(1) 2012, millions**(2) 2012, USD millions**(3) 2012,USD millions Sources: IMF, Euler Hermes

15


Regional GDP growth in emerging Europe is projectedto pick up gradually from +2.1% in 2012 to +2.9% in2013 and +3.4% in 2014, but will remain clearlybelow the long-term average (4.4% in 2002-11). Inflation has been stable in most ofthe region, providing some scope formonetary easing in countries with robustexchange rate regimes. External demand fromthe Eurozone should moderately recover later in2013.Economic activity moderatedfurther in the region as a whole inQ4 2012, increasing by justabout +1% y/y after +1.5% y/y inQ3, and early indicators pointto continued weakness in Q12013. Hungary, Slovenia, Croatiaand Serbia contracted in 2012 andUkraine also slipped into recession in H2. These countries,along with Romania which has narrowly escaped recession, will remain highly vulnerable to financial stresses in the nearfuture as macroeconomic andstructural imbalances have notbeen fully addressed. Slovenia willcontract again in 2013 andcontinues to face an EU/IMFbailout at some point. The CzechRepublic also contracted in 2012but has remained low risk thanksto continued prudent policies thathave also kept unemployment incheck (7% in 2012). The SlovakRepublic and Poland continued tolose momentum in Q4 owing todeclining domestic demand butsolid net exports provided for full-year growth of +2% in 2012, a ratethat is also within reach in 2013.Russia posted weaker thanexpected Q4 growth (+1.8% y/y)and industrial output shrank inearly 2013, such that full year 2013growth has been reviseddownwards to +3.8% (after +3.4%in 2012). In Turkey, the latest datafor Q4 2012 and early 2013 supportthe soft landing assumption aswell as the projected accelerationof GDP growth to about +4% in2013 from +2.2% in 2012._MS

Sweden

Norway

Iceland

Finland

Belarus

Poland

UkraineGermany

France

Switzerland Austria

Slovenia

Bulgaria

LithuaniaLatvia

Turkey

GeorgiaArmenia

Romania

Serbia

NorvègeBosnia&Herzegovina

Netherlands

Belgium

UnitedKingdom

Moldavia

CzechRepublic

Slovakia

Macedonia

DenmarkIreland

Spain

PortugalItaly

Gibraltar (UK)

Vatican

Malta

Greece

Cyprus

Azerbaijan

Russia

Estonia

Montenegro

Hungary

Croatia

Russia

Lux.

Albania

Europes


Country Risk Level*Western EuropeGermanyFranceUnited KingdomItalySpainNetherlandsSwitzerlandSwedenNorwayBelgiumAustriaDenmarkGreeceFinlandPortugalIrelandLuxembourgIceland

Central and Eastern EuropeRussiaTurkeyPolandCzech RepublicUkraineRomaniaHungarySlovak RepublicAzerbaijanBelarusCroatiaBulgariaSloveniaLithuaniaSerbiaLatviaCyprusEstoniaBosnia and HerzegovinaGeorgiaAlbaniaArmeniaMacedoniaMaltaMoldovaMontenegro

Population**(1) GDP**()2) GDP per capita**(3)

low low low

sensitive sensitive medium

low low low

medium low low high low

sensitive sensitive

low sensitive

sensitive sensitive

low medium

high high high low

sensitive high high

medium sensitive sensitive

high sensitive

high low high high high high high

medium high high

, 415 16,279 39,26682 3,367 41,09964 2,580 40,56563 2,434 38,48261 1,980 32,48648 1,340 27,98117 770 46,094

8 623 78,0129 520 54,7905 500 100,772

11 477 44,2928 391 46,2416 309 55,283

11 255 22,3295 247 45,754

11 211 19,6855 205 44,7011 55 104,0600 14 41,786

417 4,490 10,779143 1,954 13,690

75 783 10,51038 470 12,27511 194 18,41345 180 4,00921 171 8,01410 129 12,950

5 91 16,8559 71 7,541

10 58 6,1104 57 13,1047 51 6,8682 45 22,2653 41 12,5187 37 5,1482 27 12,1671 22 25,0231 21 15,9864 17 4,3214 16 3,6713 12 3,8503 11 3,3942 10 4,9890 8 20,0514 8 2,1321 4 6,915

Growth of the emerging Asia-Pacific economies willincrease to 6.5% in 2013 and +6.9% in 2014 (after 6.1% in2012, the slowest since 2009) moderately stronger growth inChina and India after marked slowdowns in 2012. The regionfaces headwinds from export demand growth in other regions,notably Europe, and monetary expansion has probably run itscourse, though infrastructure spending should be maintained.Nonetheless, most major economies should remain resilient.In China, Q1 2013 growth was below expectations (+7.7% y/y) withpolicies to remain cautious as re-balancing means a slower pace ofmedium-term growth and, an unexpected upsurge in export demand.Thus, GDP growth is likely to be only moderately higher in 2013-14 thanin 2012. Hong Kong and Taiwan, hit by the global slowdown in 2012, havebegun to recover and growth should be +3.5% in 2013, acceleratingtowards +4% in 2014. South Korea, also hit by the global weakness, willrecover only later in 2013, with projected growth of +2.5% in 2013 and+3.5% in 2014. Tension with North Korea has heightened again followingits recent missile and nuclear tests, subsequently tightened UNsanctions and joint military exercises of the US and South Korea. Annualgrowth in the ASEAN region will ease but remain robust ataround +5% in 2013 as strong baseeffects in 2012 (related to naturaldisasters in 2011) will wane.Growth will pick up again in 2014.Indonesia and Vietnam face someinflationary pressures, in partrelated to vulnerable exchangerates and the latter remains highrisk. GDP growth in India was+4.5% yr/yr in calendar Q4 2012(Q3 in FY2012/13), almost a four-year low. However, reformsannounced in September 2012 andmonetary policy loosening in Q12013 will improve the growthoutlook, with +6.5% and +7%forecast for 2013 and 2014,respectively. In Pakistan, a civiliangovernment completed a full termfor the first time, though overallstability and security remainfragile._DA/MS/AA

Australia

Tasmania

New Zealand

NewCaledonia (F)

VanuatuVanuatu

MalaysiaSingapore

Brunei

Indonesia

Thailand

Cambodia

Laos

Vietnam

Philippines

Sri Lanka

MyanmarIndia Bangladesh

BhutanNepalPakistan

Afghanistan

Turkmenistan

Kazakhstan

Uzbekistan Kyrghyzstan

Tajikistan

Mongolia

China

Hong Kong

Taiwan

NorthKorea

South Korea

Japan

Indonesia

PapuaNew Guinea

Indonesia

SolomonIslands

Vanuatu

Tuvalu

Micronesia

Guam (US) MarshallIslands

Nauru

Fiji

Kiribati

Maldives Palau (US)

16


Asia-Pacific

3,795 15,157 3,9941,354 8,250 6,0931,258 1,947 1,547

49 1,151 23,495245 895 3,656

23 466 20,13470 377 5,39429 307 10,476

5 268 50,9757 258 35,844

96 241 2,495180 231 1,281

16 201 12,24890 138 1,534

152 119 77921 60 2,81662 54 87828 52 1,839

5 33 6,47433 20 59431 19 626

0 17 40,81514 14 984

3 10 3,4896 9 1,4547 7 1,0265 6 1,1371 4 3,5500 2 6,0991 2 2,267

37 1,731 47,26123 1,542 67,284

4 167 37,4167 15 2,1471 4 4,5051 1 1,8340 1 3,0240 1 3,8530 0 4,5380 0 1,695

128 5,984 46,915


Population**(1) GDP**()2) GDP per capita**(3)Country Risk Level*low

OceaniaAustraliaNew ZealandPapua New GuineaFijiSolomon IslandsVanuatuSamoaTongaKiribati

low low

sensitive high high

sensitive sensitive

high sensitive

low low low

sensitive low low low low low

sensitive high high high high

sensitive high high high high high low high high high high high high high

sensitive

South, Central and East AsiaChinaIndiaKorea (South)IndonesiaTaiwanThailandMalaysiaSingaporeHong KongPhilippinesPakistanKazakhstanVietnamBangladeshSri LankaMyanmar (Burma)UzbekistanTurkmenistanAfghanistanNepalBruneiCambodiaMongoliaLaosTajikistanKyrgyzstanEast TimorMaldivesBhutan

Japan

17

Euler Hermes Economic Outlook no. 1193 | March 2013 | Macroeconomic, Risk and Insolvency Outlook Euler Hermes

Worldtrade

Annex 1

Export destination in %

Sources: IHS Global Insight, IMF

Cumulative 12 months to the end of December 2011 ! Using this table : Canada (row 1) send 73.7 % of its exports to the USA (column 2)AMERICAS ASIA EUROPE

Cana

da

Unite

d St

ateS

Mex

ico

Arge

ntin

a

Braz

il

Japa

n

Chin

a

Indi

a

Sout

h Ko

rea

Germ

any

Fran

ce

Italy

Spai

n

Neth

erla

nds

Belg

ium

Gree

ce

Aust

ria

Finl

and

Irela

nde

Luxe

mbo

urg

Port

ugal

Unite

d Ki

ngdo

m

Swed

en

Norw

ay

Denm

ark

Switz

erla

nd

Russ

ia

Euro

zone

Euro

pe -

27

Rest

of m

onde

Tota

l exp

orts

(USD

bn)

Canada 73.7 1.2 0.1 0.6 2.4 3.7 0.6 1.1 0.9 0.7 0.4 0.2 1.1 0.5 0.0 0.1 0.2 0.1 0.0 0.1 4.2 0.1 0.6 0.1 0.3 0.3 4.3 8.9 4.3 452.5

USA 19.0 13.3 0.7 2.9 4.5 7.0 1.5 2.9 3.3 1.9 1.1 0.7 2.9 2.0 0.1 0.2 0.2 0.5 0.1 0.1 3.8 0.4 0.2 0.2 1.7 0.6 13.2 18.2 17.1 1,480.7

Mexico 3.1 78.6 0.6 1.4 0.6 1.7 0.5 0.4 1.2 0.2 0.4 1.4 0.6 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.6 0.0 0.0 0.0 0.3 0.1 4.1 5.4 7.0 349.7

Argentina 3.0 5.5 1.4 21.6 1.3 7.3 1.3 1.2 2.8 0.8 2.5 3.3 3.3 0.4 0.2 0.0 0.1 0.2 0.0 0.2 1.1 0.1 0.1 0.7 0.1 1.2 13.9 16.8 35.9 78.2

Brazil 1.2 10.1 1.5 8.9 3.7 17.3 1.3 1.8 3.5 1.7 2.1 1.8 5.3 1.5 0.1 0.2 0.3 0.1 0.0 0.8 2.0 0.2 0.4 0.2 0.6 1.6 17.7 20.7 26.3 2,56.0

Japan 1.1 15.5 1.2 0.1 0.8 19.6 1.3 8.0 2.8 1.0 0.6 0.4 2.2 0.8 0.0 0.1 0.1 0.1 0.0 0.1 2.0 0.2 0.2 0.1 1.1 1.4 8.4 11.6 19.9 824.4

China 1.3 17.1 1.3 0.4 1.7 7.7 2.7 4.4 4.0 1.6 1.8 1.0 3.1 1.0 0.2 0.1 0.3 0.1 0.1 0.1 2.3 0.3 0.2 0.3 0.2 2.0 13.7 18.7 21.0 1,901.5

India 0.6 10.8 0.4 0.1 1.7 1.8 6.2 1.6 2.7 1.6 1.7 1.0 3.2 2.5 0.3 0.2 0.1 0.1 0.0 0.2 2.9 0.3 0.1 0.3 0.3 0.6 13.6 18.0 30.3 306.7

Korea (South) 0.9 10.0 1.7 0.2 2.1 7.1 23.9 2.3 1.7 1.0 0.7 0.3 0.8 0.4 0.2 0.1 0.1 0.1 0.0 0.1 1.0 0.2 0.1 0.1 0.2 1.8 6.0 10.0 25.0 562.5

Germany 0.5 5.6 0.7 0.2 1.0 1.1 5.1 1.0 1.0 10.1 6.2 3.5 6.9 4.7 0.5 5.8 0.8 0.4 0.6 0.7 6.6 2.2 0.7 1.5 4.7 3.1 40.7 62.7 11.0 1,391.9

France 0.7 5.0 0.5 0.3 0.9 1.5 3.1 0.7 1.0 16.7 8.3 7.4 4.3 7.4 0.7 0.9 0.4 0.5 0.5 1.0 6.7 1.4 0.4 0.6 3.0 1.5 48.4 62.0 14.8 584.4

Italy 0.7 5.9 0.9 0.3 1.3 1.2 2.7 1.0 0.8 13.3 11.8 5.4 2.5 2.6 1.3 2.4 0.4 0.3 0.1 0.9 4.7 1.1 0.4 0.6 5.4 2.5 42.0 49.7 17.4 515.4

Spain 0.5 3.4 1.3 0.4 1.1 0.8 1.5 0.6 0.4 10.6 17.8 8.3 3.0 2.9 0.7 0.9 0.4 0.3 0.1 8.3 6.7 1.0 0.5 0.6 1.9 1.1 53.7 57.5 17.0 300.1

Netherlands 0.3 3.3 0.3 0.1 0.5 0.6 1.4 0.4 0.8 26.2 9.3 4.8 3.1 14.1 0.5 1.4 1.0 0.7 0.4 0.7 7.7 1.9 0.8 1.3 1.2 1.5 62.4 68.2 8.5 649.4

Belgium 0.5 4.5 0.3 0.1 0.6 0.9 1.7 2.3 0.3 18.7 17.0 4.6 2.7 12.5 0.5 1.0 0.6 0.5 1.9 0.5 7.2 1.5 0.5 0.7 1.5 1.3 60.8 74.4 8.7 464.5

Greece 0.7 5.2 0.3 0.1 0.1 0.1 1.2 0.2 0.3 7.9 2.9 9.5 2.1 2.0 1.3 0.9 0.7 0.1 0.1 0.6 4.0 0.6 0.1 0.5 0.6 1.5 28.6 50.8 34.4 31.1

Austria 0.4 4.0 0.3 0.1 0.7 0.8 2.2 0.7 0.7 32.3 4.2 7.9 1.7 1.6 1.4 0.4 0.4 0.2 0.1 0.3 3.0 1.2 0.3 0.5 4.5 2.8 52.3 72.8 11.2 171.8

Finland 1.6 5.1 0.3 0.2 0.9 1.7 4.8 1.1 1.0 10.2 3.2 2.4 1.8 7.0 2.9 0.3 0.8 0.2 0.0 0.3 5.3 12.1 2.8 2.1 1.3 9.4 29.1 56.7 17.5 76.9

Ireland 0.6 22.3 0.6 0.1 0.3 1.9 1.7 0.2 0.3 7.0 5.7 3.4 3.6 3.5 15.5 0.3 0.3 0.3 0.1 0.5 16.2 1.0 0.4 0.5 4.2 0.5 40.5 60.3 3.8 122.0

Luxembourg 0.5 2.5 0.4 0.1 0.2 0.3 1.1 0.3 0.1 22.2 15.6 5.4 1.8 4.1 13.2 0.5 1.8 0.5 0.6 0.2 7.3 2.2 0.4 0.6 4.3 1.4 66.6 80.4 5.5 21.7

Portugal 0.5 3.3 1.1 0.1 1.3 0.4 0.9 0.2 0.1 13.6 12.1 3.7 25.1 4.0 3.2 0.3 0.6 0.6 0.3 0.1 5.1 1.0 0.2 0.6 0.9 0.3 68.7 73.5 11.2 58.5

UK 1.5 9.9 0.3 0.1 0.5 1.3 2.1 1.7 0.7 10.9 7.4 3.4 3.3 7.9 5.4 0.4 0.6 0.6 6.0 0.1 0.6 2.1 1.0 1.0 7.1 0.9 46.4 53.2 10.7 463.9

Sweden 0.7 5.5 0.5 0.1 1.1 1.1 3.1 1.1 0.6 10.5 4.9 2.7 2.0 5.2 4.8 0.3 1.0 6.5 0.5 0.1 0.5 7.4 9.3 6.5 1.0 1.8 38.9 59.2 1.7 175.9

Norway 1.6 5.6 0.1 0.0 0.5 1.2 1.8 0.3 1.0 11.1 7.2 2.3 1.6 11.6 2.7 0.1 0.6 1.6 1.1 0.0 0.5 27.2 6.5 3.3 0.8 0.9 40.4 80.9 0.9 158.7

Denmark 0.8 5.5 0.3 0.2 0.7 1.7 2.5 0.5 0.6 17.0 4.4 3.0 2.5 4.9 1.5 0.6 0.7 2.5 0.9 0.1 0.4 9.9 13.2 5.7 0.9 1.8 38.5 67.8 7.6 109.2

Switzerland 1.3 10.3 0.6 0.2 1.1 3.2 4.3 1.4 1.1 20.2 7.1 7.8 2.8 2.5 2.0 0.5 3.2 0.4 0.4 0.2 0.4 4.8 0.8 0.4 0.5 1.5 47.7 56.9 8.6 234.7

Russia 0.1 3.2 0.1 0.2 0.4 2.9 6.5 0.7 2.7 4.6 2.2 5.6 1.2 12.3 0.9 0.7 0.1 2.4 0.0 0.0 0.0 2.1 1.0 0.2 0.4 1.8 30.0 45.6 43.4 495.9

Euro zone 0.5 5.3 0.6 0.2 0.9 1.0 3.1 0.9 0.8 12.4 9.6 5.5 4.0 5.0 5.7 0.6 2.7 0.7 0.4 0.5 1.3 6.6 1.8 0.6 1.0 3.3 2.2 48.8 63.2 12.8 4,422.6

EU (27) 0.6 5.2 0.5 0.2 0.8 1.0 2.7 0.9 0.7 13.7 8.7 5.2 3.7 5.0 5.1 0.6 2.5 0.9 0.9 0.4 1.0 6.0 2.0 1.0 1.2 3.2 2.3 48.2 66.5 12.5 5,850.7

Rest of World 2.3 20.8 2.0 0.3 1.6 9.5 20.1 5.7 5.0 4.3 1.7 2.2 1.9 1.5 1.6 0.3 0.6 0.1 0.1 0.0 0.2 2.3 0.6 0.3 0.3 -0.6 1.5 14.7 18.7 54.3 5272.9

Total of imports 430 1,968 332 57 200 694 1,394 351 425 1043 598 458 324 513 391 63 157 68 60 25 75 539 147 77 83 176 217 3,804 5,168 4,098 17,831.7

(bds $)

GDP, inflation (change over the period, in %), unemployment rate (in % of labour force)Sources: IHS Global Insight, Euler Hermes forecasts

18


Country 2011 2012 2013 2014

forecasts

Annex 2

Economic forecasts

USA GDP 1.8 2.2 1.8 2.7Inflation 3.3 2.0 1.5 2.1Unemployment rate 8.9 8.1 7.8 7.2General government balance (% of GDP) -8.3 -7.2 -6.4 -5.8Public debt (% of GDP) 101 105 108 110 Current account (% of GDP) -3.1 -3.1 -3.2 -2.9

Canada GDP 2.6 1.8 1.9 2.5Inflation 2.9 1.4 1.4 2.1Unemployment rate 7.5 7.3 7.3 7.1General government balance (% of GDP) -4.4 -3.8 -3.0 -2.5Public debt (% of GDP) 85 89 90 89 Current account (% of GDP) -2.7 -3.0 -2.8 -2.6

Japan GDP -0.5 1.9 1.0 0.9Inflation -0.3 0.0 0.3 1.6Unemployment rate 4.6 4.3 4.3 4.1General government balance (% of GDP) -9.5 -9.9 -11.6 -10.0Public debt (% of GDP) 202 213 215 223 Current account (% of GDP) 2.0 1.0 0.9 1.0

Eurozone GDP 1.5 -0.5 -0.3 1.2Inflation 2.7 2.5 1.9 1.9Unemployment rate 10.2 11.5 12.2 12.5General government balance (% of GDP) -4.1 -3.4 -2.6 -2.0Public debt (% of GDP) 88 92 94 94 Current account (% of GDP) 0.1 1.2 1.4 1.4

Germany GDP 3.1 0.9 0.7 1.9Inflation 2.1 2.0 1.8 2.0Unemployment rate 6.7 6.5 6.7 6.6General government balance (% of GDP) -0.8 0.2 0.2 0.4Public debt (% of GDP) 81 82 80 78 Current account (% of GDP) 5.7 6.4 6.5 6.5

France GDP 1.7 0.0 0.1 0.9Inflation 2.1 2.0 1.6 1.8Unemployment rate 9.6 10.2 10.9 11.0General government balance (% of GDP) -5.2 -4.8 -3.8 -3.2Public debt (% of GDP) 86 92 94 95 Current account (% of GDP) -2.0 -2.2 -1.9 -1.5

Italy GDP 0.5 -2.4 -1.2 0.7Inflation 2.8 3.0 1.6 2.1Unemployment rate 8.4 10.6 11.2 11.0General government balance (% of GDP) -3.9 -3.0 -2.3 -1.8Public debt (% of GDP) 121 127 129 127 Current account (% of GDP) -3.1 -0.6 -0.1 0.2

Spain GDP 0.4 -1.4 -1.5 0.7Inflation 3.1 2.4 1.6 1.3Unemployment rate 21.6 24.9 26.4 25.8General government balance (% of GDP) -9.4 -10.0 -6.6 -5.0Public debt (% of GDP) 69 88 97 101 Current account (% of GDP) -3.5 -1.2 0.8 1.2

Netherlands GDP 1.1 -0.9 -0.5 1.0Inflation 2.4 2.8 2.2 1.8Unemployment rate 5.4 6.4 7.3 7.5General government balance (% of GDP) -4.4 -4.1 -3.5 -3.1Public debt (% of GDP) 66 70 73 74 Current account (% of GDP) 9.7 9.0 9.2 9.4

Belgium GDP 1.8 -0.2 0.1 1.2Inflation 3.4 2.6 1.8 2.0Unemployment rate 7.2 7.3 7.7 7.7General government balance (% of GDP) -3.9 -3.0 -3.0 -2.8Public debt (% of GDP) 98 100 100 100 Current account (% of GDP) -1.4 -1.2 -0.5 0.4

GDP, inflation (change over the period, in %), unemployment rate (in % of labour force)Sources: IHS Global Insight, Euler Hermes forecasts

19


forecasts

Country 2011 2012 2013 2014

Austria GDP 2.7 0.8 0.4 1.4Inflation 3.3 2.5 2.1 2.2Unemployment rate 4.2 4.4 4.6 4.4General government balance (% of GDP) -2.5 -3.1 -2.7 -2.0Public debt (% of GDP) 72 74 75 75 Current account (% of GDP) 0.6 2.3 2.4 2.5

Finland GDP 2.8 -0.2 0.2 1.5Inflation 3.4 2.7 2.2 2.1Unemployment rate 7.8 7.7 8.0 7.8General government balance (% of GDP) -0.5 -1.4 -1.0 -1.0Public debt (% of GDP) 49 52 52 54 Current account (% of GDP) -1.6 -1.7 -1.2 -1.4

Greece GDP -7.1 -6.4 -4.1 -0.5Inflation 3.1 1.0 -0.6 -0.2Unemployment rate 17.7 24.3 26.3 26.0General government balance (% of GDP) -9.4 -6.5 -4.7 -3.8Public debt (% of GDP) 171 161 176 182 Current account (% of GDP) -9.9 -2.9 -2.8 -2.6

Ireland GDP 1.4 0.7 1.1 1.9Inflation 1.2 1.9 1.3 1.5Unemployment rate 14.6 14.7 14.5 14.1General government balance (% of GDP) -13.4 -8.0 -7.6 -5.2Public debt (% of GDP) 106 117 121 122 Current account (% of GDP) 1.1 4.0 2.2 2.3

Portugal GDP -1.6 -3.2 -2.2 0.5Inflation 3.6 2.8 1.1 1.3Unemployment rate 12.9 15.9 18.3 18.2General government balance (% of GDP) -4.2 -4.9 -5.5 -4.2Public debt (% of GDP) 108 121 125 126 Current account (% of GDP) -7.0 -1.5 -1.2 -1.3

UK GDP 0.9 0.2 0.7 1.2Inflation 4.4 2.7 2.5 2.1Unemployment rate 8.1 8.0 8.0 7.8General government balance (% of GDP) -7.8 -6.5 -7.3 -6.0Public debt (% of GDP) 85 90 94 98 Current account (% of GDP) -1.3 -3.5 -3.0 -2.0

Sweden GDP 3.8 1.2 1.2 2.2Inflation 2.6 0.9 0.5 1.8Unemployment rate 7.8 8.0 8.3 8.0General government balance (% of GDP) 0.2 -0.2 -0.5 -0.5Public debt (% of GDP) 38 38 39 38 Current account (% of GDP) 7.0 7.2 7.1 6.6

Denmark GDP 1.1 -0.6 0.5 1.5Inflation 2.7 2.4 1.7 1.9Unemployment rate 7.7 7.7 7.6 7.5General government balance (% of GDP) -2.0 -3.8 -2.4 -1.9Public debt (% of GDP) 47 48 48 47 Current account (% of GDP) 5.6 5.4 4.8 4.6

Norway GDP 1.3 3.0 2.2 2.8Inflation 1.0 0.8 1.4 1.8Unemployment rate 3.3 3.2 3.2 3.0General government balance (% of GDP) 13.6 13.3 13.1 13.0Public debt (% of GDP) 39 35 31 28 Current account (% of GDP) 12.8 13.5 13.6 13.2

Switzerland GDP 1.9 1.0 1.1 1.6Inflation 0.3 -0.7 -0.2 0.4Unemployment rate 3.0 2.8 2.9 2.9General government balance (% of GDP) 0.5 0.5 0.3 0.4Public debt (% of GDP) 35 35 34 33 Current account (% of GDP) 8.4 12.9 12.1 12.9

20

The evaluation of the overall level of country risk is based on a central element, the country grade, a measure of transfer and convertibility risk and of the quality of thebusiness climate, which is determined by a combination of three analyses:(i) the Macroeconomic Rating (ME) based notably on analysis of: the structure of the economy, budgetary and monetary policy, indebtedness, the external balance, along with

the stability of the banking system and other factors.

(ii) the Structural Business Environment Rating (SBE) based on perceptions of the regulatory and legal framework, control of corruption and relative ease of doing

business.

(iii) the Political Risk Rating (P) based notably on analysis of: the mechanisms for transferring of power and the processes for succession, the concentration of power, the effec-

tiveness of policy, the independence of institutions, social cohesion, international relations, etc.

The first two elements (the ME Rating and the SBE Rating) are the two components used to calculated the Economic Risk Rating (E) assigned to each country. This latter is, in

turn, combined with the Political Risk Rating (P) to make our Country Grade, on a six-level scale running from AA to D, in which AA is the highest level of country grade and D is the lowest.

This country grade is then combined, for the 70 biggest economies, with the short term alerts indicator, this latter being a combined measure of a country’s vulnerability in the short

term to financing risk (Financial Flows Indicator, or FFI) and cyclical risk (Cyclical Risk Indicator, or CRI).

The four levels of the overall country risk are the result of grouping into four classes of the different possible combinations of the country grade and, as the case may be, of the

short term alerts Indicator, on a scale of low, medium, sensitive and high._

Country Risk LevelsMethodology

Annex 3


The concept of business insolvency varies from one country to another, making it hard to give international comparisons. The disparities between countries are fortwo main reasons. First, official insolvency procedures are not of equal importance everywhere. In some countries, amicable arrangements predominate (for example, in Spainand Italy), and the figures for company insolvencies are quite low, thus understating the real picture for business insolvencies. Second, in some cases, individual entrepreneurs are

included in the figures for business insolvencies. In other cases, however, they are included in the figures for personal bankruptcies, with no distinguishing between purely personal

bankruptcies and sole trader bankruptcies. In the latter cases, the number of business insolvencies is significantly understated. In the US for example, the number of businesses

used represents solely companies, and does not take account of individual entrepreneurs, estimated to total around 17 million. However, for most countries the number of

businesses and the number of insolvencies include the figures for individual entrepreneurs. Note also that the number of businesses does not directly depend on the size of a

country: Japan, for example, has more businesses than the US, although it has less than half its population and GDP.

To overcome the heterogeneous nature of national statistics and circumstances, we employ the change in insolvencies over time rather than their absolute

numbers. For each country, we have calculated an insolvency index, using a basis of 2000=100. We have then constructed our Global Insolvency Index (GII), which is the

weighted sum of the national indices. Each country is weighted according to its share of the total GDP (at current exchange rates) of the countries included in our study, which

accounted for around 85% of world GDP at current exchange rates for 2011._

InsolvencyMethodology

Annex 4

21

Euler Hermes Economic Outlook no. 1193 | March 2013 | Macroeconomic, Risk and Insolvency Outlook

Already issued:

no. 1175 > Global Macroeconomic PerspectivesThe slowdown is confirmed, the weaknesses remain, the risks endure

no. 1176 > Special ReportGreen Economy

no. 1177-1178 > Macroeconomic, Risk and Insolvency OutlookOn the edge

no. 1179 > Global Sectors ReviewLooking for growth where it can be found

no. 1180 > Business insolvency in France (only available in French)The overall decrease in French insolvencies hides several weaknesses

no. 1181 > Macroeconomic, Risk and Insolvency OutlookA fog cannot be dispelled by a fan

no. 1182 > Special ReportPayment periods in Europe: wide gaps

no. 1183-1184 > Macroeconomic, Risk and Insolvency OutlookToo much time wasted saving time

no. 1185 > Global Sector OutlookEcono.mic sectors put to the test

no. 1186 > Macroeconomic, Risk and Insolvency OutlookIn 2013, we take the same and start again

no. 1187 > Special ReportThe Reindustrialization of the United States

no. 1188 > Special ReportTransport: a two-speed world

no. 1189-1190 > Macroeconomic, Risk and Insolvency OutlookWorld heads for sixth year of crisis: something the Maya did not forecast!

no. 1191 > Global Sector OutlookNow where did global demand go?

no. 1192 > Special TeportTrade Routes: What has changed, what will change

no. 1193 > Macroeconomic, Risk and Insolvency OutlookEurope: still looking for a second wind

To come:

no. 1194 > Business Insolvency Worldwide

Economic Outlookseries…

22


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>IrelandEuler Hermes Ireland Allianz HouseElm ParkMerrion RoadDublin 4Tel.: +353 (0)1 518 7900

>IsraelICIC, 2, Shenkar street68010 Tel AvivTel: + 97 23 796 2444

>ItalyEuler Hermes Europe S.A. Rappresentanza per l’ItaliaVia Raffaello Matarazzo, 1900139 RomeTel.: + 39 06 87001

>JapanEuler Hermes Deutschland AG Japan BranchKyobashi Nisshoku Bldg. 7F8-7 Kyobashi, 1-chome, Chuo-KuTokyo 104 0031Tel.: + 81 3 3538 5403

>KuwaitPlease contact United Arab Emirates

>LatviaPlease contact Poland

>LithuaniaPlease contact Poland

>MalaysiaEuler Hermes Singapore Services Pte Ltd.Malaysia BranchSuite 3A_13A Level 13A, Block 3APlaza Sentral, Jalan SentralJalan Stesen Sentral 550470 Kuala LumpurTél. : +603 2264 8556 (or 8599)

>MexicoEuler Hermes Seguro de Crédito S.A.Blvd. Manuel Avila Camacho #164,8° pisoCol. Lomas de BarrilacoDeleg. Miguel HidalgoMexico DF CP 11010Tel.: + 52 55 5201 7900

Subsidiaries

Siège social : Groupe Euler Hermes — 1, place des Saisons — 92048 Paris La Défense Cedex — FranceTél. : + 33 (0) 1 84 11 50 50 — Fax : + 33 (0) 1 84 11 50 17 — www.eulerhermes.com


>MoroccoEuler Hermes Acmar37, bd Abdelattif Ben Kaddour20050 CasablancaTel.: + 212 5 2279 0330

>The Netherlands Euler Hermes Nederland NVPettelaarpark 205216 PD’s-HertogenboschTel.: + 31 73 688 9999

>New ZealandEuler Hermes New Zealand LtdLevel 1, 152 Fanshawe StreetAuckland 1010Tel.: + 64 9 354 2995

>NorwayEuler Hermes Norge Holbergsgate 21 P.O. Box 6875 St. Olavs Plass0130 OsloTel.: + 47 23 25 6000

>OmanPlease contact Poland Arab Emirates

>PhilippinesPlease contact Singapore

>PolandTowarzystwo Ubezpieczen Euler Hermes S.A.ul. Domaniewska 50 B02-672 WarsawTel.: + 48 22 363 6363

>PortugalCOSEC - Companhia de Seguro de Créditos, S.A.Av. da República, nº 581069-057 Lisbon Tel.: + 351 21 791 3700

>QatarPlease contact United Arab Emirates

>RomaniaEuler Hermes Europe S.A.BruxellesSucursala BucurestiStr. Petru Maior, nr.6,Sector 1011264, BucarestTel.: + 40 21 302 03 00

>RussiaEuler Hermes Credit Management OOO Office C08, 4-th Dobryninskiy per.,8Moscow, 119049Tel.: + 7 495 98128 33 ext 4000

>Saudi ArabiaPlease contact United Arab Emirates

>SingaporeEuler Hermes Singapore Services Pte Ltd3 Temasek Avenue# 03-02 Centennial TowerSingapore 039190Tel.: + 65 6297 8802

>SlovakiaEuler Hermes Europe S.A, pobockapoist’ovne z ineho clenskeko statuPlynárenská 7/A821 09 BratislavaTel. : + 421 2 582 80 911

>South AfricaPlease contact Italy

>South KoreaEuler Hermes Hong Kong ServicesKorea Liaison OfficeRoom 1411, 14th Floor, Sayong Platinum Building156, Cheokseon-dongChongro-kuSeoul 110 052Tel.: + 82 2 733 8813

>SpainEuler Hermes Crédito,Sucursal en Españade Euler Hermes France-S.A.Paseo de la Castellana, 95 Planta 14Edificio Torre Europa28046 MadridTel.: + 34 91 417 77 67

>Sri LankaPlease contact Singapore

>SwedenEuler Hermes Sverige filialKlaraBergsviadukten 90P.O. Box 729 101 64 StockholmTel.: + 46 8 55 51 36 00

>SwitzerlandEuler Hermes Deutschland AG,Zweigniederlassung Zürich Tödistrasse 658002 ZürichTel.: + 41 44 283 6 5 65

Euler Hermes Reinsurance Tödistrasse 658002 ZürichTel.: + 41 44 283 65 85

>TaiwanPlease contact Hong Kong

>ThailandAllianz C.P. General Insurance Co, Ltd323 United Center Building30th FloorSilom RoadBangrack, Bangkok 10500Tel.: + 66 2638 9000

>TunisiaPlease contact Italy

>TurkeyEuler Hermes Sigorta A.sMaya Akar enterBuyukdere Cad. No:100k:7,34394, Esentepe/IstanbulTel. : + 90 212 290 76 10

>United Arab EmiratesEuler Hermesc/o Alliance Insurance (PSC) Warba Center, 4th FloorOffice 405 PO Box 183957DubaiTel.: + 971 4 211 6005

>United KingdomEuler Hermes UK 1 Canada SquareLondon E14 5DXTel.: + 44 20 7512 9333

>United StatesEuler Hermes North AmericaInsurance Company800 Red Brook BoulevardOwings Mills, MD 21117Tel.: +1 410 753 0753

Euler Hermes UMA Inc.(trade debt collection)600 South 7th StreetLouisville, KY 40201-1672Tel.: +1 800 237 9386

>VietnamPlease contact Singapore

Siège social : Groupe Euler Hermes — 1, rue Euler —75008 Paris — FranceTél. : + 33 (0) 1 40 70 50 50 — Fax : + 33 (0) 1 40 70 50 17 — www.eulerhermes.com

Subsidiaries

Siège social : Groupe Euler Hermes — 1, place des Saisons — 92048 Paris La Défense Cedex — FranceTél. : + 33 (0) 1 84 11 50 50 — Fax : + 33 (0) 1 84 11 50 17 — www.eulerhermes.com

www.eulerhermes.com Euler Hermes Economic Outlook Global sectors review is publishedtwice a year by the Economic Research Department of Euler Hermes 1, rue Euler, 75008 Paris, France – Tel.: + 33 (0) 1 40 70 53 77

This document reflects the opinion of the Market Management, Strategic and EconomicStudies Department of Euler Hermes. The information, analyses and forecasts contained herein are based on the Department'scurrent hypotheses and viewpoints and are of a prospective nature. In this regard, theMarket Management, Strategic and Economic Studies Department of Euler Hermes has noresponsibility for the consequences hereof and no liability. Moreover, these analyses aresubject to modification at any time.

www.eulerhermes.com The Economic Outlook is published once a monthby the Economic Research Department of Euler Hermes1, place des Saisons 92048 Paris La Défense Cédex E-mail: [email protected] – Tel. : +33 (0) 1 84 11 50 46

This document reflects the opinion of the Economic Research Department of Euler Hermes. The information, analyses and forecasts contained herein are based on the Department'scurrent hypotheses and viewpoints and are of a prospective nature. In this regard, the Economic Research Department of Euler Hermes has no responsibility for theconsequences hereof and no liability. Moreover, these analyses are subject to modificationat any time.

macroeconomic, risk and insolvency outlook europe: still looking … · 2019. 11. 14. · growth...

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