Le economic evolutions recorded in the Mediterranean and Gulf countries (GCC), as well as their implications regarding the exports of Italian products were described in today's press conference by Euler Hermes, with the presentation of a study on the subject, which we report as an attachment together with the complete press release.
As reported by Wilfried Verstraete, the CEO of the Euler Hermes Group, by the end of the year global GDP growth is expected to reach +2,4%, down on initial forecasts, before rising to +3.1% in 2014. While emerging economies are expected to remain the driving force behind global growth for 2013 and 2014, respectively at 4,4% and 4,9%, the general slowdown in growth in Asia and a higher-than-forecasted contraction of GDP in the Eurozone in 2013 could send global insolvencies soaring (+8% in 2013; +2% in 2014).
According to Michele Pignotti, Head of the Mediterranean, Middle East and Africa region at Euler Hermes, “stable economic growth and a high degree of commercial openness make the Middle East and the GCC key areas for the expansion of Italian exports. Construction, energy, mechanical engineering and textiles are the main export sectors.
However, there may also be a higher risk of payment defaults in some areas. Until mid-2013, we recorded a triple-digit increase in Turkey”.
Presenting the preliminary results of the comparative study on the Mediterranean, the Chief Economist of Euler Hermes Ludovic Subran underlined that the protagonists in the three-speed regional growth of the Mediterranean will be the Old Europe, the Future Arab Champions (Abtal, i.e. Algeria, Morocco, Tunisia) and the countries of the Gateway to Asia (GCC and Turkey).
The general economic development at the regional level, which in 2013 will record +0,4%, should rise to +1,7% in 2014, with diverging growth rates between "Old Europe" (-1,3% in 2013 and 0,4% in 2014) and the rest of the region (+3,5% and +4,1%).
While advanced economies continue to be the commercial and logistical hubs of the region, the dynamics, opportunities and risks of growth vary greatly from one region to another.
It is expected that the expansion of the middle class, especially in the GCC, Morocco and Turkey, may generate greater purchasing power potential in the Middle East and North Africa (MENA) countries. However, the prolonged economic limbo in the Eurozone could negatively impact the entire region, where political and social concerns together with uncertainties about consumer demand in the MENA and GCC countries will be the main factors determining the economic climate.
While Italy resists the second consecutive year of recession (-2,4% in 2012; -1,8% in 2013), a weak recovery can be glimpsed for 2014 (+0,3%). Insolvencies increase for the sixth year in a row (+7% in 2013) which should stabilize in 2014. Domestic demand, down 10% from the pre-crisis peak, should continue to fall in 2014 (-14%), while the simultaneous decline in the availability of credit to non-financial companies remains a challenge to the economic recovery.
For Italian companies, innovation, cost competitiveness and exports are the tools to revive and sustain growth. Italian exports are currently oriented towards medium-range technical products, compared to leaders in added value such as Germany and the USA. In any case, the structure of Italian exports remains one of the most diversified in the world: chemicals, electronics, energy, mechanics, steel, textiles and cars. The buoyant global demand found in each of these sectors offers opportunities for both now and the future.
Italian businesses, already challenged at home by severe payment delays and insolvencies, will need to adopt sounder credit management practices to address the increased risks they will face in emerging countries.
As global economic and trade pathways continue to align, Italy is at a crossroads to exploit export opportunities. The global momentum creates prospects for those Italian sectors with an intensive concentration of research and development and strong specialisation, such as aeronautics, finance and information technology. Despite the lower added value, the textile sector is already one of the most competitive. The geographical location of the country translates into logistical and transport sector opportunities, thanks to the growing requirements of airport and port facilities imposed by exports around the Mediterranean basin.
