Page 73 - Monaco Economy 130-2

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MEB: "We have moved from an energy risk to a financial risk".

Growth, inflation, ageing populations... Coface's chief economist Jean-Christophe Caffet decoded
the main macroeconomic challenges ahead for the members of the Monaco Economic Board.

By Milena Radoman

What scenarios can Monegasque entrepreneurs sectors worldwide, Coface has upgraded the
expect in 2024? At a conference organised in rating of seventeen sectors and downgraded What is country risk?
February by the Monaco Economic Board , five, reflecting a cautious optimism following How liquid and solvent is a country? Is
*
COFACE's Chief Economist Jean-Christophe the impact of the recent crises. its governance good or corrupt? Or how
Caffet analysed the global macroeconomic effective are its courts in settling debts?
situation and outlined the underlying trends Volatility These are the questions that companies
for the next five to ten years. Finally, looking to the longer term, Jean- ask themselves when they want to invest
Although 2023 ended with 2.6% global growth, Christophe Caffet sees the current and future in or export to a country. That's why
half a point higher than expected (largely due situation as the end of a cycle of strong many organisations, such as COFACE,
to anti-inflation shields), the economist sees growth and low inflation. A number of major calculate country risk. COFACE, which
new risks emerging in the near term. “We challenges lie ahead, starting with the energy guarantees receivables arising from a
have moved from a risk that was essentially transition “which is going to be onerous in a sale by a French exporter to a foreign
energy-related last year to one that is now higher interest rate environment”. Another buyer and covers the risks faced by
mainly financial”. He added: “Paradoxically, trend is the relocation of production units to exporters, now offers an assessment of
this is more reassuring because it's something “friendly” countries, known as “friendshoring”, 162 countries on a scale of 8 levels: A1,
we are more familiar with. or the duplication of units to reduce risks A2, A3, A4, B, C, D, E. “The assessment
Despite rates tightening, there are no plans (China + 1 policy, which adds another country is based on macroeconomic criteria
to return to pre-Covid conditions. “We are to China in the event of a problem). Finally, (economic and social, political, banking,
back to the rates of before the 2008 crisis, ageing populations, particularly in developed financial and environmental risk) and
but with levels of public and private debt that countries, will put a strain on finances. microeconomic criteria. Our model
have risen considerably”. The consequences: To sum up, “we will be moving from a globalised compiles a huge amount of reliable
financing conditions will remain challenging world with strong growth, cheap energy and data (IMF, central banks, markets, World
for many businesses which are experiencing easily accessible money to a more volatile and Bank) to which we add internal data on
an increasing number of insolvencies. fragmented world, with growth that, although payment experience, company claims,
Global growth for 2024 should be in the region weaker, will still be present”, concluded etc.” explains Jean-Christophe Caffet,
of 2.2%, mainly driven by emerging countries, COFACE's Chief Economist. chief economist at Coface, pointing
with Europe continuing its “sluggish” pace and out that global warming is increasingly
the United States, which had over performed, *in collaboration with Gramaglia Assurances and Banque taken into account. “Environmental risk
expected to slow down (from 2.4% in 2023 to Populaire Méditerranée. takes into account both physical risks
1.2% in 2024). (pollution, flooding, etc.) and transitional
Despite this, Coface has raised its Country Risk risks (quality of solutions implemented,
rating for 12 countries, including 6 in Europe. introduction of new regulations, etc.).
In its other ranking, which looks at business

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