Brexit, trade war and social unrest
In presentations and panel discussions it quickly became clear that the coming years will be challenging. The weakening of the global economy is underway. This is partly due to Brexit, impending trade wars, social unrest in many countries and immigration problems. The 2019 risk countries include the United Kingdom, Italy, Turkey and Argentina. Growth in China is also declining sharply, which has a direct negative effect on international trade and the global economy. It is remarkable that car sales, which reached highs in recent years, are now declining enormously in China. Moreover, household debt in China is rising sharply. The first signs of the cyclical economic downturn are clear. These will shape the picture in the coming years. It is difficult to predict how long this period will last, although it is unlikely that the impact will be as great as in 2008/2009.
Protect yourself against increasing export risks
If we look at the current risk assessment of the Netherlands, we see that we are among the best five countries in the world with an A1 status (in accordance with Coface risk assessment). Gross National Product growth will weaken to 2,2% in 2019 compared to 2,7% in 2018. Inflation is slowly rising from 1,6% to 2,4% and government debt has been declining sharply since 2016 . Unemployment is still very low compared to many European countries. If we look at the number of bankruptcies, it is expected that there will be an increase again after years of decline.
All in all, the Netherlands appears to have a solid basis for coping with the economic downturn. But because Dutch companies export a lot, it is important to closely monitor economic developments in the various countries. The number of non-payments and bankruptcies will increase sharply worldwide. So carefully consider who you are doing business with. Credit insurance is not an unnecessary luxury. If your debtors unexpectedly do not pay, you have a safety net to absorb these losses.
Would you like to know more about how you can protect yourself against the weakening of the global economy in general or specifically in risk countries? Please contact us at info@xolv.nl or 073 – 820 02 95. Our specialists will be happy to assist you.
