Welcome to the latest issue of D&B's Country Insight Update.
Fears of a trade war remain the main risk facing the global economic outlook over the rest of 2018 into 2019 as US president Donald Trump continues his assertive ‘America First’ policy. The tit-for-tat tariff measures introduced by the global trading giants China and the US are threatening confidence in global supply chains, causing a flight to safety in the financial markets and disrupting commodities markets. Furthermore, the resultant strengthening of the US dollar in line with risk aversion is putting pressure on emerging market currencies, particularly those of economies with high levels of external debt or payments imbalances, such as Argentina, Brazil, India, Mexico, Russia and Turkey.
However, bright spots do exist. In July, the EU and Japan signed a widespread trade deal that will eliminate virtually tariffs in a market of over 600 million people and accounting for around one-third of global trade. EU-US trade war in automotive trade seems to be averted. Earlier in 2018, 11 countries signed the Trans-Pacific Partnership. In addition, certain sectors will benefit from Chinese or US tariffs, such as soybean farmers in Brazil, despite the seasonality of northern and southern hemisphere production. China’s Belt and Road initiative may also prop up capital flows to emerging markets from its banks. Yet, debt servicing challenges have emerged for a string of Belt and Road borrowers, including Angola, Pakistan, Sri Lanka, Zambia and Zimbabwe.
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.
Proxy indicators suggest that growth has continued in the second quarter.
The election hands victory to the ruling party.
The shifting political landscape destabilises the external environment.
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