- On Thursday, 15 November 2018 more than 350 business leaders, bankers, diplomats and representatives of academia will be participating in the Credendo Trade Forum, the theme of which is ‘America first or America alone?’ At this Forum discussions will focus, on the one hand, on the new balances in the global economy and, on the other, on digitalisation as a way of saving the Belgian economy. Two well-known international speakers, Peter Praet and Idriss Aberkane, will present their views on these two themes.
- The favourable economic climate is a source of confidence for 4 in 5 Belgian companies.1
- When asked if they agree that the world is becoming increasingly unstable, 80% answered affirmatively.
- Ensuring you are well informed and covering yourself against default remain absolutely essential, as almost half of businesses indicate that they have previously suffered damage or loss as a result of an unpaid invoice.
Favourable economic climate a source of confidence for Belgian exporters
The global economic climate is favourable, with Asia, which once again achieved GDP growth in excess of 6%, the clear frontrunner. However, emerging economies in Europe and Sub-Saharan Africa also continue to post growth figures above the 3% mark. “This trend is also evident in our own country classifications. For the short term we issued just 7 downgrades as opposed to 13 upgrades, for example, and we observe the same trend in the long-term ratings, issuing 3 downgrades and 6 upgrades,” says Nabil Jijakli, Group Deputy CEO of Credendo. It should therefore come as no surprise that over 4 in 5 Belgian companies are feeling confident about the future. They regard neighbouring countries, EU countries and Asia as the regions with the greatest export potential, followed by North America and the Middle East. Biotechnology (64%), pharmaceuticals (59%), chemicals (51%), construction and dredging (41%) and aerospace (28%) have been identified as the sectors in which export potential is particularly favourable.
An unstable world
Nevertheless, 4 in 5 companies are convinced that the world is becoming increasingly unstable, mainly as a result of the policies of US President Donald Trump (72%), the weakness of European Union policy (68%) and climate change (41%). 85% believe that the European Union should therefore take measures to protect its businesses, a significant increase on the figure that emerged during last year’s survey (75%).
“Import tariffs on steel, the trade war with China, US withdrawal from trade agreements, the sanctions against Iran that have been reimposed... Trump’s policies are leaving their mark on the global economy and also on Belgian exporters. Our survey reveals that as many as 1 in 6 firms has experienced a negative impact of his policies on their business,” explains Nabil Jijakli. “Moreover, as many as 4 in 5 Belgian businesses are convinced that additional protectionist measures will follow, both in the United States and in other countries, with a resulting negative impact on global trade.”
Changing economic world order
However, the positive trend we have seen in recent years could always come to an end as numerous risks remain or are increasing. First of all, geopolitical tensions remain or are aggravating in various regions all over the world: the Middle East and the Persian Gulf, the South China Sea, North Korea, various African countries, and closer to us, in Ukraine. Default risk is increasing again due to a new debt buildup after systematic debt forgiveness obtained before, rising interest rates, more protectionism, trade wars, terrorism, volatile commodity prices and volatile governance in many countries.
“Nevertheless, it is not all doom and gloom. Asia remains the most stable region in terms of country risks and other countries are also emerging as promising export destinations. Countries such as China, India, Morocco and Botswana, for example, have a relatively low level of risk, while others, such as Jamaica, Belarus and Uzbekistan, have seen their risks decline. However, it remains important at all times to ensure you are well informed and to cover yourself against default, as almost half of respondents indicated that they had previously suffered damage or loss as a result of an unpaid invoice. Credendo can help with this,” explains Nabil Jijakli.
You will find the most remarkable results of the survey here.
Group Deputy CEO
rue Montoyerstraat 3
M +32 478 25 11 33
1 Survey conducted by business magazine Trends for Credendo in which 946 Belgian business leaders participated.