WORLD OVERVIEW OF COUNTRY RISK Country Risk Conference Coface Country Risk > Johannesburg, South Conference Africa 2014 > 12 th June 2013 Thursday, 15 th May 2014 Johannesburg, South Africa 1
Agenda 8.30 am Breakfast 9.30 am Introduction Garth DE KLERK / CEO, Coface South Africa 9.45 am Economic Outlook, Business Climate & Emerging Markets Saijil SINGH / Lead Analyst, Coface South Africa 10.30 am Tracking the Future Daniel SILKE / Independent Political Analyst 11.15 am Q & A Session 11.30 am Closing
Economic Outlook, Business Climate & Emerging Markets Saijil SINGH Lead Analyst, Coface South Africa 3
Contents The Global Situation BRICs and MINTs The Next Markets to Emerge Who will drive the future Global Economy March 2013 RECEIVABLES BOOK ANALYSIS TRAINING / MARCH 2013 4
1 How is the Global Economy doing? March 2013 RECEIVABLES BOOK ANALYSIS TRAINING / MARCH 2013 5
Spain Italy France Germany Euro Zone UK Japan USA Advanced Economies Emerging Economies World Global Growth is picking up GDP Growth (%) 6 5 2013 2014 4,44,5 4 3 2 1 0,7 0,4 0,8 0,3 0,5 1,7 1,0 2,1 1,7 1,51,4 1,9 2,7 1,2 2,0 3,1 2,6 0-1 -2-3 -1,2-1,9-0,4 Sources: Coface, Datastream EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 6
Country risk and business climate assessment Advanced economies EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 7
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014p 2015p 2007 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f 2017f 2018f Euro zone: Risks are still there Unemployment rate (European Commission forecasts) Public Debt scenarios (% GDP, Coface forecasts) 27 22 17 12 Germany Austria Spain France Greece Ireland Italy Portugal 180 140 100 7 60 France Italy Greece Portugal 2 20 Spain -3-20 Source: European Commission Sources: IMF, Coface EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 8
Spain Japan Italy United Kingdom Euro zone France United States Germany Spain: Some light at the end of the tunnel Credit growth (%) Corporate Debt, % GDP 1% Spain: Credit to Corporates 15% 120 120 0% 10% 100 100-1% 5% 80 80-2% -3% 0% 60 40 60 40-4% -5% -5% -6% Month on Month -10% 20 0 20 0-7% Year on Year (RHS) -15% -8% -20% -9% -25% 07-08 07-09 07-10 07-11 07-12 07-13 Sources Coface, Datastream Highest level of indebtedness since 2007 Sources : Coface, Banque de France EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 9
2 Are the BRICs here to stay? March 2013 RECEIVABLES BOOK ANALYSIS TRAINING / MARCH 2013 10
BRIC Factsheet GDP GDP per Capita GDP GDP per Capita $ 2,518B $11,600 $ 1,791B $16,700 Population 205.7M EOB Index Rank 126 EOB Index Rank 120 Population Competitiveness Rank 53 138.1M Competitiveness Rank 66 GDP GDP per Capita GDP GDP per Capita $ 1,843B $3,700 $ 6,989B $8,400 Population 1.21B EOB Index Rank 132 EOB Index Rank 91 Population Competitiveness Rank 56 1.34B Competitiveness Rank 26 EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 11
BRIC Nations: Growth Slowdown GDP Growth (%) 17.00 12.00 7.00 2.00 BRAZIL RUSSIA INDIA CHINA SOUTH AFRICA -3.00-8.00 2007 2008 2009 2010 2011 2012 2013 2014(e) 2015(f) 2016(f) 2017(f) 2018(f) 2019(f) EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 12
Q2 2005 Q1 2006 Q4 2006 Q3 2007 Q2 2008 Q1 2009 Q4 2009 Q3 2010 Q2 2011 Q1 2012 Q4 2012 Q3 2013 Emerging markets: A supply-constraint slowdown South. Af Russia GDP Growth (%) 3,6 1,9 2,5 4,8 1,3 1 2000-2011 Av. 2013 (p) 2014 (p) 15% 10% Domestic demand (7 large emerging economies excluding China, Q/Q y-1,%) Household Consumption Investment India China 4,7 5 7,8 7,7 7,2 10,6 5% 0% -5% Brazil 2,3 1,7 3,8-10% 0 2 4 6 8 10 12 Sources: datastream, Coface forecast Source: datastream EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 13
BRICS s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 14
BRICS s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 15
Country risk and business climate assessment CIS EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 16
BRICS s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 17
BRICS s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 18
China: tensions on the corporate sector Percentage of long overdue amount (more than 180 days) in domestic annual turnover 50% 40% 43.5% 35.8% 47.6% 2011 2012 2013 30% 28.6% 25.8% 20% 10% 19.0% 18.9% 17.5% 11.4% 12.3% 9.4% 8.7% 5.7% 6.1% 9.7% 0% < 0.5% 0.5% - 2% 2%-5% 5%-10% > 10% Overdue payment unpaid for more than 6 months has a high chance to turn into bad debt, and companies with 6-months-or-longer overdue payment weighing more than 2% of their annual turnover could see liquidity problem. 22% of interviewed companies replied that longer overdue amount was larger than 5% of the reported domestic turnover in 2013 (18.1% in 2012). Chaori s default : a new era for Chinese corporate risk? EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 19
BRICS s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 20
MINTs : The new BRICs? EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 21
MINT Nations: Better than BRICS? GDP Growth (%) 10.00 8.00 6.00 4.00 2.00 0.00 MEXICO INDONESIA NIGERIA TURKEY SOUTH AFRICA -2.00-4.00-6.00 2007 2008 2009 2010 2011 2012 2013 2014(e) 2015(f) 2016(f) 2017(f) 2018(f) 2019(f) EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 22
MINTs : Where are they going? EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 23
MINT s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 24
MINT s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 25
MINT s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 26
MINT s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 27
Emerging Economies: Income Disparities EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 28
0,5 1,1 1,7 1,6 2,3 2,5 2,6 2,4 3,2 3,1 4 4 4 4,1 4,2 5 5,4 Latin America Ecuador Peru Chile Venezuela Colombia Argentina Mexico Brazil 2014 Latin America s outlook : resilient but under Emerging market average 6 5 ave 2000-2012 2013f 2014f GDP Growth Latin America 4 3 2 1 0-1 EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 29
Country risk and business climate assessment Latin America EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 30
Emerging Markets: Graduate Mobility Source: UNESCO Institute of Statistics EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 31
3 Who will now pick up the flag? March 2013 RECEIVABLES BOOK ANALYSIS TRAINING / MARCH 2013 32
«New» Emerging players : CIPPS GDP Growth (%) 12.00 10.00 8.00 6.00 4.00 Columbia Indonesia Peru Phillipines Sri lanka 2.00 0.00 2007 2008 2009 2010 2011 2012 2013 2014(e) 2015(f) 2016(f) 2017(f) 2018(f) 2019(f) EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 33
CIPPS s Export Partners Columbia % Exported 2008 % Exported 2013 % Exported 2018 40 35 30 25 20 15 10 5 0 USA China Spain Panama Venuzeula Netherlands EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 34
CIPPS s Export Partners EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 35
CIPPS s Export Partners Peru EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 36
CIPPS s Export Partners Philippines EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 37
CIPPS s Export Partners Sri Lanka EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 38
KTZBE Nations: High Risk and Good Returns GDP Growth (%) 14 12 10 8 6 KENYA TANZANIA ZAMBIA BANGALADESH ETHIOPIA 4 2 0 2007 2008 2009 2010 2011 2012 2013 2014(e) 2015(f) 2016(f) 2017(f) 2018(f) 2019(f) EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 39
KBETZ s Export Partners Kenya EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 40
KBETZ s Export Partners Bangladesh EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 41
KBETZ s Export Partners Ethiopia EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 42
KBETZ s Export Partners Tanzania EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 43
KBETZ s Export Partners Zambia EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 44
«New» Emerging players : Why the grouping? Good Growth Resilience to Global shocks Political Stability Pronounced benefit of trade with BRIC nations Positive infrastructure developments Improving financial systems Better socio-economic and education policies Good Growth Resilience to Global shocks Political threat Lack of good trade agreements Poor infrastructure Developing financial systems and policies Poorer socio-economic and education policies EMERGING MARKETS 2.0 COFACE RISK CONFERENCE 2014 45
WORLD OVERVIEW OF COUNTRY RISK Country Risk Conference Coface Country Risk > Johannesburg, South Conference Africa 2014 > 12 th June 2013 Thursday, 15 th May 2014 Johannesburg, South Africa 46