Asian companies enhance credit risk management

Global trade is poised to increase by 2% in 2024. However, the growth rate in Asia is predicted to be restrained and may not be as strong as in previous years.

A survey by Atradius suggests that while global trade is anticipated to grow by slightly over 2% in 2024, the forecast for Asia indicates that its growth rate is likely to remain subdued, and not be as strong as in the previous year.  Atradius is a global company offering services in credit insurance, bond and surety, collections, and information. They operate in more than 50 countries worldwide.

The key factor impeding growth can be traced back to the ongoing underperformance in exports. This underperformance is likely to persist in the near term, primarily because of diminished demand from Asia’s primary export markets, such as the United States and the European Union. This could potentially weaken the domestic resilience shown by Asian economies this year.

Atradius highlighted one compelling example of this trend, which is a 6% decline in B2B credit-based trading among Asian businesses over the past year, with variations evident in different markets. Notably, Taiwan and Singapore experienced significant drops in such trading, while China and Vietnam witnessed an increase in B2B sales conducted on credit.

According to the 2023 Atradius Payment Practices Barometer survey for Asia, which surveyed companies in China, Hong Kong, Indonesia, India, Japan, Singapore, Taiwan, and Vietnam, it is evident that Asian businesses are optimistic about their growth prospects. The survey revealed that a significant 70% of Asian companies expect a surge in demand for their products and services in the upcoming months.