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Shortfalls in payment increased dramatically worldwide

In the year 2008 shortfalls in payment increased dramatically and will continue to do so, according to Coface Germany, which is a consulting firm specialized in business claims. As a consequence of this global development, Coface recently lowered its ratings of 22 countries, among these countries such as China and Russia. In total, shortfalls in payment between companies increased by 47% worldwide, said Coface.

In several countries shortfall rates are even much higher. The most dramatic increase in shortfalls in payment was registered in Spain (+131%). In the USA this figure amounted to +66%, in Germany to +25%.

According to Coface, the repercussions of the financial crisis are most felt by those countries in which the financial bubble burst first and in which there was strong economic growth in recent years: this not only relates to the USA and Spain, but also to Great Britain and Ireland where shortfalls in payment increased by 64% and 70% respectively. The respective shortfall rates for France, Japan and Italy are 42%, 40% and 36%. In these countries as well as in Germany economic growth had recently been less strong. According to Ives Zlotowski, senior economist at Coface, the shortfalls in payment crisis is going to last for at least another year or one and a half.

The current higher risk of shortfalls in payment as well as macroeconomic data led to numerous lowerings of ratings which affect all economic regions, even countries forming part of the BRIC group (Brazil, Russia, India and China).

Recent downratings relate to Australia, Taiwan, Hong Kong (from A1 to A2) as well as Mexico (from A3 to A4). A1 countries which may soon be downgraded are Germany, France, Canada, Japan, Singapore, Belgium, Denmark and Slovenia. Already downgraded to A2 were Spain, Italy, Greece, Portugal and Chile. A3-rated countries are China, Hungary and Lithuania. Bulgaria, Croatia and Romania could soon be downgraded from A4 to B. Countries with an even lower rating are Russia and Vietnam (B), the Ukraine, Ecuador and Pakistan (C).

A presentation in English containing charts and rating tables is available for free-of-charge download. GERMAN