Public debts worry Coface
A shock exceptional in its scope but not its duration. Coface, which examines the risks of outstanding companies, announced Monday at a symposium on the country risk, the end of the credit crisis. While recalling the unprecedented nature of this recession, the worst post-war related to the bankruptcy of Lehman. Between its 2007 peak and the lowest point in 2009, the global economy fell by 6.1 points, two times the oil crisis of the 1980s or the collapse of the dotcom bubble.
"There is a strong correlation between the curve of defaults and that of economic growth, said President Francois David. For six months we see an improvement in creditworthiness of companies. "After rising 19% in the first half of 2009, the total payment incidents has decreased by 40% over the last six months.With this improvement, Coface has revised upwards its ratings, while it had conducted several waves of decommissioning throughout the crisis. Note that unlike traditional agencies, which follow the sovereign debt, the insurance company is only interested in credit risk business. The improvement is true for most industrialized countries. The A2 rating of the United States is no longer under negative watch while France, Germany and Japan, in particular, came under positive watch.
Household debt
But if the bulk of the storm passed, many clouds darken the sky of the recovery. It is primarily the weakness of private demand, which remains constrained by the debt ratio and savings rates, and deterioration of the labor market."The key to growth lies in the particular behavior of the American consumer, accounting for 18% of global GDP," notes Francois David.
Another black spot, the rate of industrial capacity utilization remains limited, especially slowing business investment. "The recovery in 2010 will depend even public spending," says the chief economist at Coface, Yves Zlotowski. With the risk of digging a little more deficits. The situation is particularly alarming for the "pigs" – Portugal, Ireland, Greece and Spain – where the debt has increased the most between 2007 and 2011. "The markets could force them to implement budget cuts, which contribute more to the recession," said Yves Zlotowski. The economist is also concerned about overheating in China and the rebound of stock markets, including commodities, stronger and faster than the real economy.Coface expects global growth in 2010 of 2.7%, driven by emerging markets (5.3%) against 1.4% for developed countries.