Country Risk Update
Welcome to the latest issue of D&B's Country Risk Update.
The short-term global outlook is still qualified by the uncertainty created by the British electorate’s vote to leave the EU. Consumer and business surveys in the UK and EU have shown a sharp decline in confidence since the vote, which will transmit into lower spending and investment plans in the short term. Nevertheless, in July, financial market volatility fell from the levels seen in the week immediately after the vote, and even if downgrades to global growth forecasts for 2016 have become the norm, these are not all due to the ‘Brexit’ economic effect.
As expected, the US dollar has strengthened, pushing the possibility of any Fed interest rate rise back to December. Meanwhile, the pound sterling and the euro have weakened in line with the ‘hunt’ for yield as longer and deeper monetary easing is expected, with investors continuing to pull equity funds out of Europe. In terms of commodities, by August oil prices had fallen 20% since the UK’s vote, dragged lower by the strong dollar, resilient shale oil supply and prodigious product inventory buildups; meanwhile gold has strengthened as the zero returns from the precious metal begin to look attractive compared to negative yields on government bond issues. Against this background, we are currently forecasting that global real GDP growth will slow to 2.2% in 2016, from 2.5% in 2015 and 2.7% the previous year; growth in the UK is set to fall to 1.3% in 2016, from 2.3% in 2015.
This complimentary newsletter from D&B's Country Insight Services group has been put together by their team of experts using the most up-to-date information to provide a snapshot of the latest macro market risk situation, and provides an excellent overview for those exposed to cross-border credit or investment risks.
D&B Country Insight Snapshots
Designed with the help of our customers these reports build on the key areas assessed by 'D&B's Country Insight Model' and deliver a perfect balance between mitigating risk exposure and providing insight into new opportunities.
The economy maintains its momentum despite the UK's Brexit vote.
Read D&B Country Insight Snapshot: Spain.pdf
China's diplomatic freeze puts the economy under new pressure.
Read D&B Country Insight Snapshot: Taiwan.pdf
Government revenue falls due to lower oil and nickel prices.
Read D&B Country Insight Snapshot: Cuba.pdf
To learn more about how these improvements have been designed to meet your needs when trading overseas, please use the contact details below.
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