In our latest risk assessment, We have elevated Switzerland's rating from A2 to A1 in our risk barometer. This places Switzerland alongside Norway and Denmark with equally low default risk across Europe.
We have just released our latest barometer, in which we assessed Switzerland as one of the countries with the lowest default risk for export credits. That's the reason why we assessed the country risk level from A2 to A1, which is the lowest risk level.
Switzerland's low default risk
It is totally justified. Indeed, the Swiss inflation rate has been below the Swiss National Bank's 2 per cent target without interruption since June 2023. Our experts assume that the Swiss inflation rate will remain below the SNB target in 2024. The Swiss National Bank has raised interest rates "relatively mildly" to 1.75 per cent and has left them at this level since June 2023. In addition, a chart on the development of individual sectors in Western European countries shows that the Swiss agri-food sector has been upgraded from high to medium risk. Only Italy and France are rated just as highly.
Of the 162 countries evaluated, Norway was previously the sole country in which we assessed the default risk as being very low (A1). In addition to Switzerland, Denmark has now been upgraded to a rating of A1. For its part, Belgium was upgraded to A2. The big majority of European countries are rated at a risk level of A3, with just a single country, namely Israel, being downgraded from A2 to A3.
Global Economic outlook and challenges ahead
Overall, after global economic growth of 2.6 per cent last year compared to the previous year, we can say that we expect a growth rate of 2.2 per cent for the current year 2024 and point to the uncertainties in various regions of the world. Christiane von Berg, who is the Chief economist for Benelux and DACH region at Coface, says: "Geopolitical risks play an increasingly important role in economic risks. As these are almost impossible to predict, the uncertainty of economic forecasts remains extremely high."
Given that core inflation in the majority of developed economies remains at double the target rate set by the respective central banks, the report states that “the challenge for 2024 will be to see whether the restrictive monetary policy that has been underway for over 18 months is enough to go the last mile and bring inflation back to 2 percent. And to keep it there”.
