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Follow on Google News | Three emerging countries come out of the crisis strongerCoface announces that it is upgrading Turkey, Brazil and Russia
By: Coface UK Turkey and Brazil obtain the best ratings in their history The very sharp contraction in international trade was the main factor in transmitting the crisis from the industrialised countries to the emerging countries. The shock wave did indeed hit the emerging countries, but they were able to react. They notably undertook large-scale countercyclical monetary and budgetary policies as early as the start of 2009. Coface raised Turkey’s rating a notch to A4, putting the country in the best risk category (A1 to A4) for the first time. After a significant external shock, the country should have a growth rate of nearly 7% in 2010. Turkey is the country that has undertaken the greatest easing of monetary policy in the world, with a drop of 1025 basis points in the key rate between November 2008 and December 2009. Turkey has shown excellent foreign currency liquidity risk management without turning to the IMF. The country has demonstrated a sustainable recovery driven by dynamic household consumption and investment. Overall, Coface emphasised the resistance of Turkish companies and observed good payment experience. After more than tripling between July 2008 and March 2009, non-payments fell to their pre-crisis level in September 2009. Most of the companies with overdue payments have finally cleared their trade debt. The non-payment rate continued to drop in the first half of 2010, falling far below the worldwide average. Brazil was upgraded to A3, its best rating since the country rating was created. The shock was very limited due to the high level of diversification in the economy. There has been a rapid, large-scale recovery. The country should have a 7.3% growth rate in 2010, and 4.5% in 2011, according to Coface’s forecast. Business is mainly driven by dynamic household consumption and investment. The strong recovery observed in 2010, with an unusual growth rate for the country, is accompanied by a monetary policy that should avoid overheating. All sectors are displaying good performances: Russia recovers to its pre-crisis level Russia has recovered its B rating after having been downgraded during the crisis as the country recorded the worst recession among the G-20 countries in 2009. Renewed private consumption is now driving growth. Companies are pursuing their debt reduction process and investment is therefore contained. According to Coface, the payment behaviour of Russian companies, which had seriously deteriorated during the crisis, has improved significantly and has returned to its pre-crisis level. Russia nonetheless still has a rating that is 2 notches lower than the other BRICs, due to deficiencies in its business climate, notably the lack of transparency in the company information available. “The crisis brought to light a reorganisation among the emerging countries,” Yves Zlotowski, chief economist at Coface, explained. “All of them, without exception, were affected by the crisis. But some, such as Turkey and Brazil, passed the test of the crisis successfully and have proven to be more resistant than expected. And some, such as Russia, which got over the shock quickly, have returned to their pre-crisis levels.” Brazil • Pre-crisis rating (Dec. 2007): A4 • Crisis rating (Dec. 2009): A4 • Post-crisis rating (Sept. 2010): A3 Turkey • Pre-crisis rating (Dec. 2007): B • Crisis rating (Dec. 2009): B • Post-crisis rating (Sept. 2010): A4 Russia • Pre-crisis rating (Dec. 2007): B • Crisis rating (Dec. 2009): C • Post-crisis rating (Sept. 2010): B Caution: the Coface country rating does not concern sovereign debt, but rather indicates the average level of risk presented by a country’s companies on their commercial transactions. This average trend is not a guide to each company’s rating, which is determined by its own characteristics. It is therefore essential that the partners of a company located in one of the cited countries check the company’s specific Coface rating. ENDS For information about Coface and press enquiries, please contact: Trevor Byrne, Tel: +44 (0)1923 478393; Email: trevor_byrne@ Website: www.cofaceuk.com About Coface Coface's mission is to facilitate global business-to- www.coface.com In the UK and Republic of Ireland Coface has been a leading provider of credit management services since 1993, it’s objective being to enable businesses to trade securely at home and overseas. Operating from offices in London, Dublin, Watford, Birmingham, Leeds and Cardiff allows Coface to provide a local service. The company’s credit insurance offer integrates credit assessment, collection services and cover for unpaid debts. Multinational businesses can protect their worldwide subsidiaries through Coface’s international network. Coface provides working capital and off balance sheet facilities to complement its product line. The company also provides access to domestic and international business information and a collection network at home and overseas. Coface is also a recognised operator in the London political risk market and a provider of surety bonds and guarantees. www.cofaceuk.com and www.coface.ie The Coface worldwide map of risks is available on www.cofaceuk.com, in the Country Risk and Economic Section. # # # We offer trade credit management solutions from credit insurance to related services such as credit reports, online credit ratings, debt collection, and receivables finance, our holistic approach to credit management gives you greater flexibility. End
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