How Sace’s 2023 Risk Map is changing
Facts, numbers, trends and scenarios. What emerges from Sace's 2023 Risk Map
The pandemic, the conflict in Ukraine and the inflationary flame. These are the three events bringing uncertainty that have characterized the last three years . To which must be added the increasingly frequent extreme natural events caused by climate change.
Sace's 2023 Risk Map , presented during the streaming event “Stabile Fragilità. The ways of sustainable growth”, tries to trace the possibilities for Italian companies despite the increase in geopolitical, climatic and financial risks.
THE 2023 RISK MAP AS A COMPASS FOR ITALIAN COMPANIES
The Risk Map aims to be a compass for the investments of Italian companies, a guide that accompanies them in a fluid and uncertain international context. “Tools such as our risk map are now more than ever essential for Italian companies to continue to grow on the markets in a competitive, healthy and sustainable way – underlines Alessandra Ricci, CEO of Sace -. Credit, political and climate risks interact with each other and must be read in an integrated manner, but the message strongly emerges that sustainability and transition are essential priorities in which to invest in order to develop resilience and build paths of future growth for companies and for our Village".
INFLATION RISES AND GDP DECLINES
Sace's expectations for 2023 speak of a weak economic cycle: world inflation is estimated to fall by around 5% for 2023, and world GDP growth will also fall : the decline will be 1.3%, " over two percentage points lower than the pre-Russian-Ukrainian conflict projections”, while “global trade will remain substantially unchanged according to Oxford Economics estimates”.
The volumes of international trade in goods and services will be particularly affected by these difficulties: the former will be affected by the weakness of demand , as well as a physiological slowdown after the very positive performances of the last two years. The latter, however, will continue to benefit from the recovery of post-pandemic tourist flows.
RISK MAP: EUROPEAN ECONOMIES BREAKTHROUGH BY WAR IN UKRAINE
Sace analyzed the performance of 194 countries. The level of credit risk decreases for 57, remains stable for 72, while an increase is recorded in 65 cases. Europe " is feeling the effects of the heavy escalation of the Russian-Ukrainian crisis ", reads the report.
The main advanced geographies “present an unchanged credit profile, with slowing growth and public finances held back by the burden of supporting households and businesses due to the pandemic and high energy bills, as in the case of Germany and France. Well Portugal and Greece , which last year repaid its debt to the International Monetary Fund in advance and exited the European Commission's surveillance programme”.
A LOST OPPORTUNITY FOR COUNTRIES THAT HAVE USED FINANCIAL SUPPORT
If the risk indicators for political, geopolitical and climatic events have worsened in recent years, "the energy transition indicators are improving". To say it is Alessandro Terzulli, chief economist of Sace.
In the field of energy transition, the areas of greatest growth are Europe, Latin America and Asia, led by China . "North America is also making progress, thanks to the progress recorded by the United States and Canada, while Brazil confirms its position close to the most virtuous countries on a global scale thanks also to the substantial contribution of hydroelectric power and the expansion of solar power", it is law in the study.
Terzulli notes "a general stability of the global credit risk framework, without however showing the hoped-for trend reversal after last year's marked increases". This, if on the one hand is good news because, despite the adverse geopolitical circumstances , the major economies have managed to maintain an unchanged level of risk, "on the other hand it represents a missed opportunity for those geographies that have benefited from ample financial support ”.
RISK MAP: THE ITALIAN BUSINESS SYSTEM IS RESILIENT
A good answer comes from the Italian business system which proves to be "resilient". Our exports “performed better than France and Germany – assures Emma Marcegaglia , president and managing director of Marcegaglia Holding and former president of Confindustria. The vision for 2023 is "overall positive, because important challenges have been faced and, if we have clear long-term visions, we can play better than a few years ago".
WE NEED A CLEAR POLICY ON ENERGY
The events that have generated uncertainty in recent years have brought the international balance back to the center of attention, including for businesses. “Geopolitics is an integral part of the considerations, but we need to do more risk management reasoning – said Emma Marcegaglia -. And we must continue to consolidate the strong alliance between Sace, banks and businesses ".
One of the issues that weighs the most on the economic planning of companies is the cost of energy. “I believe that, at a European and Italian level, the issue of energy is important in the short and long term to ensure this continuity of resilience. We need a clear short – term and long – term policy . And decarbonization must not be ideological, but put technological neutrality at the center – concluded Marcegaglia -. Then we must continue to invest heavily in innovation. I believe that the European Fund should be created not to respond to the US Inflation Reduction Act (IRA), but to invest in new technologies”.
THE MOST PROMISING AND RISKY MARKETS
Among the markets offering the greatest growth opportunities are India, Vietnam, the United Arab Emirates, Brazil and Mexico. These countries have substantially improved credit risk profiles in all respects.
India, thanks to "progressive fiscal consolidation and robust economic growth", ranks among the best performers in the main global markets. Among the Asian economies, conditions worsen in China where " banking and corporate risks are increasing in relation to a high level of private debt ".
However, the situation in the countries of Sub-Saharan Africa is much more complex, due to the worsening of political risk, while "a selective approach" is needed, notes Sace, in the Middle East and North Africa. In particular, in the Middle East the oil and energy producing countries recorded an immediate benefit from the increase in prices, with positive effects on public finances. This group includes Saudi Arabia, the United Arab Emirates and Oman.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/come-cambia-la-mappa-dei-rischi-2023-di-sace/ on Thu, 09 Feb 2023 15:32:00 +0000.