Global Risks

According to the latest Economic Outlook released by Atradius - Credito y Caucion, the risks that threaten the robustness of growth and global trade in 2018 have grown since the report released this past spring. "The risks to our economic forecasts have increased in the last six months. The trade war between the United States and China is developing as the rebound of the US stock market begins to falter. The growth of emerging countries is already under pressure due to the adjustment of the Federal Reserve and the probability that monetary policy causes turbulence in the global financial market continues to rise. Geopolitical tensions are growing as the risk of an upward adjustment in the price of oil increases. The only risk that has been reduced is that of a abrupt landing in China, "the report says.

The proliferation of commercial war is the main global risk, according to the analysis of the leading credit insurer in Spain. If the United States implements higher tariffs on Chinese imports or expands current tariffs on other products, China will respond with countermeasures. "The greatest proliferation can also occur if the United States Administration departs from the truce with the European Union and begins to impose tariffs. Global growth would suffer a serious blow, clearly higher than 0.5% in 2018 and 0.8% in 2019 compared to a more moderate trade war, "says the report released by Atradius - Credito y Caucion.

The second biggest global risk for the insurer's forecasts involves an uncontrolled monetary policy of the United States, to combat possible effects of the trade war as a growth of inflation or a fall in demand, which would have effects on the global economy. In addition, there is a growing risk of a major correction in the financial markets, which would particularly affect emerging markets; the geopolitical uncertainties derived from the rupture of the United States with its traditional allies and the intra-European tensions; and the volatility of the oil prices

The risk of a hard landing of the Asian engine is the only one that is reduced in the analysis of Credito y Caucion , in spite of the resurgence of the commercial war with the United States. "The Chinese authorities have shown themselves capable and willing to defend the GDP growth targets set for their economy. Therefore, we consider unlikely a hard landing of the Chinese economy, considered as a GDP growth between 4% and 4.5%. Even so, the incentives to achieve growth will increase financial vulnerabilities. That will force the Chinese authorities to take more aggressive measures to restrict the growth of credit in the future, which will again bring the possibility of a hard landing. Therefore, we can not rule it out. "