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A Word From The CEO: Stuart Anderson

2 Minute Read
Written by Stuart Anderson
9 February 2023

Entering the new year under the sign of the rabbit, a symbol of longevity, peace, and prosperity in Chinese Culture, 2023 is predicted to be a year of hope. Specifically, hope that the current headwinds will die down and we will see some early improvements. Yet globally indicators suggest 2023 will be a difficult year.

The impacts of rising inflation, energy costs and higher interest rates are tipped to continue to grow although we hope all will level off during the year bringing a more balanced global order to trade. It is probably inevitable that we will see an increase in insolvencies and Asia will not be an exception.

Allianz Trade, the world’s largest credit insurer, has advised;

The confluence of slower growth, higher inflation, wage bills and interest rates has increased corporate risks, mainly in the construction, transportation, telecom, machinery and equipment, retail, household equipment, electronics, automotive and textiles sectors.”

 The energy crisis creates a massive profitability shock for European firms, which governments can only partially offset.

The reopening of China provides more hope as Asia’s engine room and with a European partial recession Asia is expected to grow but Bernard Aw, Coface’s Chief Economist, has suggested:

“… there is a risk that, despite the policy measures and reopening, China still might not see the economic boost it expects. With the global economy expected to see a sharp downturn in 2023, another year of sub-par GDP growth in China will add to the gloom”

At this time businesses need to ask themselves, when assessing their customer base,

  • When was the last time we conducted a full health check on our customer list?
  • What was the impact on our customers throughout the pandemic?
  • Do we have the same level of capital and cashflow to maintain our business in a healthy environment?

So perhaps 2023 is year of hope of a quick resolution to the Ukraine situation and no further economic shocks.

Kind regards

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