Paris/Vienna (OTS) – The mood among entrepreneurs, financial market participants and consumers improved somewhat at the beginning of the year. The expected supply bottlenecks have not occurred due to the mild winter so far, but the economic glimmers of hope are too weak and the prospects for spring too uncertain to improve the country risk assessment in Europe, according to the current country risk analysis by the credit insurer Coface. Norway remains the only country of the 162 countries evaluated by Coface with the top grade of A1. The rest of Western Europe sits between A2 and A3, with the exception of the UK and Ireland, which received an A4 rating due to Brexit and Italy has a B grade since the recent election result. Austria has been classified at A3 since the beginning of the energy crisis. “This rating is mainly due to the difficult economic environment in neighboring countries, especially Germany, which was particularly dependent on Russian gas supplies and now has to reorganize its gas supplies. This has brought energy prices in Europe to new record levels and also caused production and consumer prices to skyrocket in Austria.
“, explains Dagmar Koch, Country Manager Coface Austria.
Austria itself is also dependent on gas supplies from Russia. With a 22.7 percent share of end consumption, natural gas is the second most important energy source following oil (34.5 percent). In February 2022, 79 percent of all natural gas imports came from Russia; in November it was only 38 percent. Although the share increased significantly once more in December 2022, this was less due to higher deliveries from Russia and more to the fact that significantly less gas was imported overall, which means that Russia’s share increased mathematically. “New supply relationships were established with Norway, North Africa and Central Asia. In addition, the private and public energy saving measures and the increased use of other energy sources are showing success
Koch emphasizes, emphasizing that gas consumption in late autumn was 20 percent lower than in the same period of 2022 and in December (one of the most energy-intensive months of the year) was still 11 percent below the previous year’s level.
Improved purchasing power, uncertain prospects
„After a dynamic financial year 2022 with an expected growth rate of just under 5 percent, we expect a growth rate of 0.5 percent for the current year 2023
“, says the Coface Austria managing director. Consumer prices should remain at a high level. These are influenced by high wage demands. “Therefore, the purchasing power of private households should improve somewhat compared to last year
“, emphasizes Koch and explains that the prospects remain rather uncertain. This will be reflected in private investment activity. Together with the expected further interest rate hikes by the ECB of up to 150 basis points, which should bring the main refinancing rate to up to 4.0 percent, and the reduction in total assets by EUR 15 billion per month from March 2023, this should lower financing costs in Austria increase significantly. On the trade side, China should have recovered from the pandemic wave late last year in the second half of 2023. This will increase the demand for products from Western Europe, including Germany, from which the supplier industry in Austria will benefit; on the other hand, stronger Chinese demand might have a negative impact on commodity and energy prices.
turmoil in Latin America
At the beginning of 2023, the country risk changes will take place less in the western world than in individual developing countries, with downgrading once more predominating: In Latin America there has been increased political turbulence in recent weeks. This particularly affected Peru, which had previously been rated relatively well for a Latin American country with a risk assessment of A4. Haiti is another country in the Region whose country risk has been downgraded. The island nation has never had a good risk rating and has been rated at D risk since the mid-2000s.
Coface: for trade – developing business together
With 75 years of experience and the densest international network, Coface is a major credit insurer, partner in corporate risk management and in the global economy. With the aim of becoming the most agile credit insurer worldwide, Coface supports 50,000 customers in building and dynamically developing business. The products and services protect companies in national and international business and help them to make credit decisions. In 2020, Coface was active in 100 countries with around 4,450 employees and achieved sales of around 1.45 billion euros.
Questions & contact:
Coface, branch Austria
Katharina Klutz, MA
MARKETING & COMMUNICATIONS SPECIALIST
+43/1/515 54-556
katharina.klutz@coface.com
www.coface.at
