The credit crisis is spreading like wildfire since it started in January 2008 in the United States, reaching the other so-called “bubble” countries such as United Kingdom, Spain and Ireland. No country seems to be spared any longer, says credit management company Coface. First it was the industrialised countries close to the epicentre of the crisis. Then it affected those countries with no speculative bubbles but which had sustained flat growth such as Italy, France, Germany and Japan. This is in addition to the fragile emerging countries such as South Africa and Vietnam. At its recent 13th Country Risk Conference, Coface announced the downgrading of 22 country ratings. For the first time two of the largest emerging countries have been negatively watch-listed simultaneously, China and Russia. The anticipated worldwide GDP growth differential from 2007 to 2009 is now 3.1points. It fell 2.5 points between 2000 and 2001 in the previous credit crisis following the collapse of the internet bubble. This slowdown explains the rise in the Coface payment default index of over 50% between 2007 and 2008, a spokesman said. The company forecasts that the global credit crisis will only end towards the end of 2009. And it’s now similar in extent to the crises of the 80s and 90s, according to the report. It started at the beginning of 2008 and took a new dimension in the fourth quarter of 2008 when businesses in countries that had managed to hold out until then, such as Germany, became affected. The crisis is now affecting two major emerging countries – Russia and China – despite the comfortable macro-economic and financial situation they have been enjoying in recent years.
