In an FCIB members-only teleconference focusing on the global economic outlook this week, FCIA Vice President/International Economist Byron Shoulton painted a picture in which virtually all corners of the globe are being affected negatively, to varying degrees, by the ongoing euro-zone crisis.
Shoulton noted that recent agreements coming out of the EU designed to bolster debt-hobbled economies represent “the strongest act to date to save the euro, and long overdue.” But, as the situation continues to play out with the potential for Greece leaving the euro currency, and Italy or Spain possibly needing their own bailouts, export-dependant economies are taking a hit.
Shoulton noted that the drop in demand in the EU has affected the economic recovery of several nations and preventing still-growing nations from hitting their targets.
The crisis is affecting Latin and South American nations in another way, as well. Shoulton noted that European-based banks were known to fuel trade financing, with estimates of 33% and 40% of all trade financing for the region emanating from EU-based banks, especially in France and Spain. That could provide a drag on growth potential for emerging Latin trade markets.
-Brian Shappell, CBA, NACM staff writer
(Note: Shoulton wasn't negative in his entire teleconference; in fact, he noted there are notable positives, overall, to be found in a couple of regions particularly. For more, check out the lead story in this week's eNews, to be released via email Thursday afternoon and posted at www.nacm.org).