Allianz Trade in South Africa

The wicked witch of the west is (almost) dead! We're talking about inflation, of course. But will 2025 be the year we can finally stop paying attention to the men and women behind the curtain? After a super electoral year, 2025 will all be about effective policy making. As markets reached a new high this year, one question is on everyone’s mind: will risky assets continue to be “popular” (you’re gonna be popular)? In keeping with our tradition, we couldn't resist taking some 🎵 musical inspiration 🎵 for our last economic outlook of the year. So turn up the Wicked soundtrack and take a look at some of the key takeaways below! 1. Global economic growth: Not quite "dancing through life". Global real GDP growth is expected to remain moderate but steady at +2.8% in 2025-26. We expect developed economies to experience a slight slowdown, with growth tapering from +1.8% in 2025 to +1.7% in 2026. In contrast, emerging economies are likely to sustain robust growth at +4.1% across both years. 2. Is “Something bad” on the way? After the super electoral year, “the Wizards (and not us)” of policy design will be very influential for both the economy and capital markets. Political changes, such as the US elections, could reshape economic landscapes and introduce uncertainties. Geopolitical risks, including tensions between major powers, continue to be a significant concern for global stability. 3. “No one mourns the wicked”: Inflation should finally retreat to 2% in 2025, allowing for monetary policy easing to continue until end-2025. “Thank goodness” central bank policy will shift from taming inflation to supporting growth (but do not hold your breath). However, upside risks remain from potential tariff implementation in the US and unfolding retaliation measures. 4. “What is this feeling?”: Uncertainty continues for companies. While policy shifts and geopolitical risks present challenges, sectors like AI and technology are expected to see growth. Investment in infrastructure and sustainable sectors is also projected to increase. Business insolvencies are expected to increase by +2% in 2025 and to stabilize at high levels in 2026. Read the full report here: https://ow.ly/FXVB50Uuk16

We are thrilled to announce that, for the fourth consecutive year, we have been recognized as the Market #LoyaltyLeader by our valued customers and brokers worldwide, as reflected in our latest annual customers and brokers survey 🙌 This achievement is a testament to the continued trust and confidence our clients and partners place in us. A big thank you to our customers and brokers for their continued support and loyalty. You help us to shape a better tomorrow! 🌟 A heartfelt thank you also to our dedicated team, whose hard work and passion make achievements like this possible. 👉 Find out about the challenges our customers face and how we help them: https://ow.ly/LuKr50Uqz3j #CustomerExperience #YourVoiceMatters #CX

Is your business ready for the new year? While steady global growth is predicted until 2026, various opportunities and challenges wait ahead. We’ve identified five key economic trends to help guide your strategic decision-making. 📊 Learn how you can prepare for resilience and growth in 2025: https://ow.ly/OYAC50Uotsj #GlobalEconomicOutlook #AllianzResearch #EconomicTrends

What’s the outlook for the global #telecom 📱 sector? The telecom sector will benefit from the accelerating deployment of fiber networks and the global rollout of 5G, besides significant growth opportunities in emerging markets. But higher interest rates have forced some companies to reduce capital expenditures, which could be detrimental to longer-term prospects. Read the full sector risk report here 👉 https://ow.ly/l1E550TQt4w

💰 How do you maintain a healthy cash flow in times of instability? In a climate of economic uncertainty and growing insolvencies, it’s important to know how to safeguard your business against buyers who could struggle to pay you back. 💡 These 6 approaches can help optimize working capital and protect against bad debt: https://ow.ly/b6t150UfAOM #TradeCreditInsurance #TCI

Following the results of the US elections, US-China relations will remain tense and continue to fragment global trade 🌐 Although global trade remains strongly intertwined with the US economy, China has emerged as a new superpower, banking on its critical role in global manufacturing and its large and rising domestic market, according to our latest Trade Report released today. How will rising US-China tensions reshape global supply chains and impact emerging trade powerhouses? • Trade war reloaded as Trump returns to office: In his second term as US President, Donald Trump is likely to increase tariffs on Chinese and other strategic imports, which would decrease nominal global trade growth by -0.6pp in 2026. These measures are likely to hit US pharmaceuticals, automotive, metals, agrifood and machinery. • American “godfathering” vs China’s “silk” doctrine: US imports have been breaking away from China, and China has been exporting more to its own geopolitically close partners (Russia, Singapore, Vietnam, the UAE, Saudi Arabia). Bilateral trade between geopolitically aligned countries has risen by +2pps (USD620bn) to 60% of global trade in just two years. • Alignment with the US is costly for the EU: While the US and the EU share a common stance on geopolitical issues, their economic interests are not aligned. Tariffs imposed on China cost the US USD17bn per year (4% of its Chinese imports), but they cost the EU almost USD38bn per year (6.4% of its Chinese imports). • New trade hubs are emerging as winners, but making global supply chains more complex: We identify 25 economies that could benefit from the new geoeconomic order, including Vietnam, Malaysia, Indonesia and the UAE. We expect these economies to grow their share of global exports by +1.6pp over the next five years, reaching USD 1 274bn. • Choosing sides in the new geoeconomic order: Our geoeconomic distance scores, comparing the US and China’s respective geopolitical and trade links, show that China’s sphere of influence includes more next-generation trade hubs from the emerging world, while most of the Western bloc remains closer to the US. You can read the latest economic research from Allianz Trade here: https://ow.ly/beHj50U6KuU

We’re proud to kick off our fifth year of supporting Save the Children International as they work to create where every child grows up healthy, safe and educated. Save the Children responds to emergencies, delivers development programs and runs advocacy campaigns to achieve lasting, positive change for children. To help safeguard the organization’s funds in countries where the threat of confiscation is high, Allianz Trade issues a syndicated political risk insurance policy. This year, we’re strengthening our commitment by doubling our participation and expanding coverage. In his new article, Dalmar Abdirisak Nur from our Specialty Credit team shares more about Allianz Trade’s partnership with Save the Children and explores different kinds of political risk coverage. Read it here: https://ow.ly/tz6a50Ub6f2 #AllianzTradeExperts

Watch Allianz Trade in South Africa, Trade Credit Intelligence Director Luke Morawitz give his insights about US-China relations to fragment global trade, from our latest Trade report in this CNBC Africa interview with Godfrey Mutizwa🤓📰🚢 💻 https://lnkd.in/dQbB9zt5 📈 You can read more on the Trade report here 📉 · The Times: https://lnkd.in/eTEe4yeS · Business Matters: https://lnkd.in/eSY4SHxH · The Insurer: https://lnkd.in/eckQRrRi #CNBCAfrica #AllianzTrade #TradeCreditInsurance #Economics #GlobalTrade #Allianz #GlobalLeaders

🌎 This week our economists look at the return of Trump and the implications of a Republican sweep scenario: 1. Inflation, GDP and Fed Funds outlook: President Trump’s victory at the US elections and the likely full Republican control of the Congress do not change our forecasts for US GDP much but we now expect inflation to rise to 2.9% and 3.4% in 2025 and 2026. Fed Funds rates are expected to be stuck at 4.0% in 2025 and 4.25% in 2026. 2. Fiscal policy: We expect that President Trump will push through a fiscal package of around 0.5% of GDP by the end of 2025 (net of savings), as well as the full renewal of the Tax Cuts and Jobs Act of 2017, bringing the total fiscal package to 1.6% of GDP. 3. Trade policy: President Trump is expected to increase US import tariffs as early as Q2 2025 through an executive order, initially raising tariffs to 25% for Chinese imports and to 5% for imports from the rest of the world, excluding Canada, Mexico and critical goods. We estimate USD135bn worth of global exports would be at risk, equal to 4% of the projected global export gains for 2025-26. 4. Capital markets: The overall market response was more muted than in 2016 as much of the "Trump trade" had already been priced. Looking ahead, we expect US long-term interest rates to remain high, influenced by rising inflation expectations, less monetary easing and persistent fiscal deficits, and a small boost for US risky assets in 2024. Read the full report here: https://ow.ly/vaq750U24vj #Economics #Economy #USElections

Can you identify warning signs of customers who may struggle to pay you back? In a climate marked by prolonged economic uncertainty and growing insolvencies, late and non-paying buyers can threaten your business’s growth or stability. 👉 Learn 6 strategies that can help you detect early warning signs of distressed buyers, as well as help protect your cash flow from late payers: https://ow.ly/6A8i50TPNOq #TradeCreditInsurance #TCI