Protection against non-payment advised

While the global economy has rebounded from the depths of 2009, substantial challenges remain, according to Luke Doig, senior manager investment and economics at Credit Guarantee Insurance Corporation (CGIC). And, he added, while exporters have a myriad choices, credit risk must always be borne in mind. His research shows that Asian growth has been outstanding over the past eighteen months, with little adversity experienced. “The issue is whether cooling measures – especially in China – will serve to dampen growth and hence the demand for credit,” Doig told FTW. Meantime, he also noted that the US had avoided the double-dip scenario, and broadly stabilised over the past year. “Indeed, the improved unemployment situation has seen many raise their expectations for growth out of this market. “Such recovery will in turn rest on consumer confidence which in turn depends on a stable housing market.” In turn, looking at the Middle East, Doig hinted that there were some initial concerns about the credit worthiness of certain markets. “But,” he added, “this region has similarly stabilised and is set to benefit from improving oil revenues which may spur demand.” Examining the case for Africa and South America, Doig’s research revealed that both these trade regions were held by many to offer above-average returns. Africa, he admitted, obviously suffered in the downturn when demand for its goods plummeted. However the improved climate has seen enormous Chinese investment for one, with many others now beginning to show greater interest. “Certainly there is often a risk of political disturbance – which in turn impacts on commercial endeavours – and hence protection against nonpayment is advised,” Doig said.