Leading trade credit insurer Atradius has published four new reports on the markets of China, India, Indonesia and South Korea.
The country reports detail the impact of the coronavirus pandemic on each market with an overview of the economic and political situation and a future outlook for key industries. The reports are designed as an information tool for firms doing business overseas, enabling them to monitor trading risks and opportunities.
- China: The coronavirus outbreak severely hit the Chinese economy in Q1 2020, immediately impacting retail and wholesale, travel, leisure, catering, real estate, transportation, and shipping. Chinese GDP contracted 6.8% during Q1 with Atradius economists forecasting a sharp decrease in the economic growth rate in 2020, down to 1.5% from an increase of 6.2% in 2019. The subdued performance is driven by a crippling of China’s manufacturing and industrial output earlier this year. A comprehensive rebound is constrained by lingering weakness in domestic demand and sluggish demand from overseas markets which is expected to lead to a decrease in exports by more than 7% year on year. Business insolvencies are also forecast to increase sharply this year, mainly affecting the SME segment.
- India: The repercussions of the Covid-19 pandemic have hit an already weakening economy in India where the economy grew just 5.3% in 2019, the lowest annual increase in more than six years. Atradius forecasts GDP to contract 5.7% in 2020 with both investment and industrial production forecast to contract while exports are expected to decline by almost 13%. Extended supply disruptions from China have hurt those Indian industries reliant on imports while business insolvencies are forecast to increase by more than 30% year on year.
- Indonesia: A sharp downturn in economic growth is expected in Indonesia with a forecast contraction in GDP of 2.7% in 2020 after growth of 5% in 2019. Private consumption growth, a main driver of Indonesia’s economic expansion, is expected to decrease 2% this year. Indonesian exports are forecast to decrease by more than 10% in 2020. However, with exports accounting for just 22% of GDP, Indonesia is less susceptible to global trade downturns than some other Southeast Aisan countries.
- South Korea: Following GDP growth of 2% in 2019, the South Korean economy is expected to fall into recession this year with the coronavirus pandemic disrupting regional supply chains and affecting global growth. Atradius forecasts a 0.7% contraction in GDP in 2020. As the world’s leading producer of displays and memory semiconductors and the second largest shipbuilder, South Korea’s exports account for about 50% of GDP. Delayed shipments of parts from China have impacted businesses, forcing them to operate below capacity; industrial production and exports are forecast to contract by 1.5% and 7.7% respectively in 2020. A further deterioration of external demand could weigh on company profits of buisnesses in export-dependant sectors with insolvencies expected to increase sharply in 2020.