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PARIS--An expected mild global economic slowdown in 2007 should not generate major new regional credit risks for exporters, however increased debt loads of companies in emerging countries could pose significant risks, according to a 154-country study.
The study by French credit-risk specialist Coface measures the risk of non-payment faced by exporters, by sector.
"Although overall the financial situation of emerging countries has improved in the last five years, the improvement is offset by the rising exchange debt of many companies in those countries," according to Coface.
"This could lead to a chain reaction of [credit] defaults, in the case of a major economic growth slowdown, exchange crisis, or a loss of confidence in the government's management in certain countries," according to the report.
Coface said certain sectors present significant risk, textile and clothing manufacturing, both rated C-, because they suffer from strong competition from low-cost countries, especially in Asia.
Computers, B-, and telecommunication equipment, which it downgraded to B+, are confronted by price erosion and rapid changes in products. Manufacturing and retailing also face growing risks, the Coface report said.
Exporters will face slowing demand in the United States, but that should be compensated by better demand in Western Europe, spurred by improving employment, consumer spending, and reduced taxation except in Germany, and somewhat in Italy as well as a positive contribution of immigration in several countries, the report said.