Global economic growth is expected to slow slightly in , registering growth, down from in . This modest deceleration occurs against a backdrop of persistent geopolitical, financial, and social risks, according to a recent report by Coface.
Despite the challenging environment, Coface has upgraded its risk assessment for seven countries and its sector ratings for nine, signaling pockets of resilience and opportunity. The upgrades reflect a nuanced global picture, where some economies are proving more adept at navigating current headwinds than others.
Key figures highlighted in the report include the projected global growth rate, a increase in global trade during , and a concerning rise in corporate insolvencies in the United States during the second half of .
The report suggests that demonstrated the enduring strength of globalization, with history accelerating amidst both turmoil and stabilizing growth. This apparent paradox is attributed to two primary factors: the economic shock experienced in was less severe than preceding uncertainties, particularly regarding tariffs, and companies – especially those with international operations – demonstrated a remarkable capacity to adapt.
However, is beginning under significant pressure. Geopolitical risks have materialized in regions including Latin America, Iran, and Greenland. Financial risks are emerging due to high levels of debt and asset valuations in a sustained high-interest rate environment. Macroeconomic risks are also prevalent, stemming from uncertainty surrounding US economic policy and the potential for renewed trade clashes amid escalating international competition and weakening global cooperation. Social and political risks are also on the rise, fueled by growing discontent in many countries, particularly in Europe. Sanitary and climate risks remain ever-present as well.
Looking at regional performance, the United States is expected to grow by , supported by continued strong consumer spending, despite the increase in corporate failures observed in the latter half of . The Eurozone is projected to experience around growth, driven by a rebound in Germany fueled by a substantial investment plan. France, however, is expected to remain relatively stagnant at growth, constrained by a public deficit exceeding of GDP.
Central Europe is exhibiting more robust dynamics, led by Poland’s growth. In Asia, China’s growth is expected to slow to , weighing on regional momentum. Southeast Asia demonstrates uneven resilience. India, however, continues to be a key growth engine, driven by strong domestic demand and proactive government policies, with a projected growth rate of .
Commodity markets are also experiencing shifts. Oil prices are forecast to decline from per barrel of Brent crude in to approximately in , reflecting moderate demand growth and a significant increase in supply. Despite potential volatility linked to geopolitical factors, energy prices are expected to remain relatively neutral for inflation, which continues to decline in most regions.
Global trade surprised to the upside in , growing by in volume, boosted by strong US imports and a less severe increase in US tariffs than initially anticipated – averaging in November compared to the previously expected peak during tensions with China. Vietnam is benefiting significantly from the realignment of supply chains, with a increase in US imports between January and November . Europe has stabilized its external trade.
Looking ahead to , a gradual deceleration is expected, accompanied by a decrease in freight rates due to overcapacity and the potential return of traditional maritime routes.
Coface has made seven country risk assessments, including six upgrades. Chile was upgraded from A4 to A3, driven by increased investment in copper and energy, supported by a stabilized institutional context. Poland also moved from A4 to A3, benefiting from dynamic investment fueled by European funds and robust household consumption. Sweden was upgraded from A3 to A2, supported by resilient private demand and an improving labor market, alongside an expansionary fiscal policy. Cyprus improved from A4 to A3, driven by record tourism performance and European fund-stimulated activity. Barbados saw an upgrade from C to B, due to effective fiscal consolidation and a continuing decline in debt supporting economic resilience. Ecuador moved from D to C, following a strong recovery after the energy crisis, accompanied by budgetary reforms and support from the IMF.
The only downgrade was for Senegal, moving from B to C, due to budgetary drift and unsustainable debt complicating discussions with the IMF.
