Global recession inevitable, but China and India strong
Global credit insurance agency Coface predicts that the rest of the year will see the world end on a recession, contracting by 2.5 percent, but then proceed to slow growth of 1.7 percent next year.
Emerging economies will outpace industrialised countries, growing 0.7 percent this year and 4.1 percent in 2010.
“Some real economy indicators are improving, anticipation surveys of investors and consumers are pointing up and financial players are showing a renewed appetite for risk,” said François David, chairman of Coface.
The agency has maintained its lowered ratings for most European countries but has downgraded Austria, the Netherlands and Finland and put Portugal, Slovakia and the Baltic countries on negative watch as the global recession begins to affect their economies.
And while Latin America has remained steady, Central America has shown some damage from exposure to the North American downturn.
The most positive signs come from the Asia-Pacific region with China and India the strongest in recovery. However, Coface has retained the negative watch placed on China’s A3 rating in January 2009 due to recurrent problems of private sector companies, where the default payment risk is the highest.