Latest Coface assessment suggests European struggle is spreading
As Southern Europe continues to face economic gloom and doom, signs of struggle have also spread to Cyprus, India and Argentina, where previous business models are failing.
According to the latest Coface Country Risk Assessment Review, Spain and Italy have been placed under negative watch as the unemployment rate continues to soar in both countries.
Since March 2012, Spain’s unemployment rate has risen above 24 percent as company bankruptcies rise across its construction; agricultural, electrical, chemical and non-specialty trade sectors. This rise can be seen as a contributing factor to the country’s overall economic decline, hindering any possible recovery.
Italy, too, has hit record unemployment levels, with over 10 percent of the population jobless as of April 2012. The report also revealed a strong decline in payment of company debts across its metallurgy, agri-food, construction and textile industries.
Cyprus has also called for financial assistance after its banking sector was seriously exposed to Greek risks. The country’s construction sector has also been seriously affected by the burst of the property bubble.
The fear of inflation and the level of public debt have begun to upset India’s ranking, as the country experienced its weakest growth in the last nine years. The decline in quality infrastructure has triggered a growing concern among foreign investors, negatively impacting the country’s potential growth and, as a result, Coface has placed India under negative watch.
The increasingly restrictive intervention of Argentina’s Government on its import and export controls has contributed to its slow economic growth, decreasing the country’s business climate rating. These controls have begun to negatively impact household and business confidence across the country.
Despite Europe’s economic condition continuing to plummet, the Coface report reveals positive rankings for Nicaragua, Ivory Coast, Slovakia and Indonesia.
The report revealed Indonesia’s domestic markets are flourishing as China’s demand for raw materials increases. Reforms to its banking sector and its priority to tackle corruption has helped Indonesia to withstand today’s uncertain economic climate.
The report further disclosed that Guatemala and the Czech Republic country ratings have also declined.