Mubo "Global Credit Risk Index Worsens from 3.2% to 4.7% Year-on-Year"

The Korea Trade Insurance Corporation (K-sure) analyzed on the 14th that the 'credit risk index' of overseas markets where our export companies trade has generally increased from 3.2% to 4.7% over the past year.

On the same day, K-sure announced the release of the '2023 Overseas Market Credit Risk Report,' which analyzed the credit risk of global overseas importers of our companies. According to the report, the global credit risk index rose from 3.2% in 2022 to 4.7% compared to the previous year, indicating an overall increase in risk levels.

The credit risk index refers to the proportion of companies rated as poor credit grade (R grade) among all credit-rated companies. An increase in the index can be interpreted as a higher likelihood of unsettled trade transaction payments.

K-sure generates approximately 50,000 overseas company credit evaluation data annually. Through the publication of this report, K-sure comprehensively analyzed the possibility of credit risk occurrence related to payment by importers worldwide who trade with our companies.

The report identified the increase in trade insurance incidents due to the deterioration of foreign companies' business performance and the rise in the number of U.S. sanctioned companies against Russia as major factors worsening overseas market credit risk.

In particular, in the case of Russia, the number of sanctioned entities increased more than 12 times compared to the previous year, and due to banking-related sanctions making trade payment remittances difficult, the credit risk index recorded a sharp increase to 43.1%, about six times higher than the previous year, showing a rapid credit deterioration phenomenon, the report analyzed.

In other regions, the credit risk index worsened in the order of T?rkiye and China compared to the previous year. By industry, credit risk was highest in wholesale and retail trade, machinery and equipment wholesale, and automobile sales.

Besides the analysis related to the credit risk index, the report also provides the latest issues that export companies can use for payment risk management, such as ▲the credit risk status of China's home appliance wholesale and retail industry ▲the increase in credit risk in the U.S. wholesale and retail industry.

A K-sure official explained, "Export companies can use this overseas market credit risk report to timely grasp the latest credit risk trend changes in their main markets by company," adding, "By utilizing trade insurance, they can manage credit risk-related risks more safely and pre-cash export receivables."

Lee In-ho, President of K-sure, stated, “We will continue to strive to discover and share diverse and practical information that export companies can use for market development and risk management.”

Exterior view of the Trade Insurance Corporation building.

This content was produced with the assistance of AI translation services.