The popular vote on the Responsible Business Initiative will take place on November 29, 2020 and the campaign will start this summer. On that date, the Swiss people will be able to vote for or against the initiative.
If the population accepts the initiative, it would still have to be implemented on a statutory level. If the initiative does not reach the majority of votes, the indirect counter-proposal will be adopted (subject to a referendum). The reporting and due diligence obligations would then need to be observed for the first time in the financial year commencing one year after the entry into effect.

KKS counter1. Key elements of the Initiative-proposal

The RBI seeks to introduce a new article 101a to the Federal Constitution. This article proposes the following key requirements for companies with registered office, central administration or principal place of business in Switzerland (Swiss companies) :
– Respect all internationally recognized human rights and international environmental standards in Switzerland and abroad and ensure that companies under their (actual) control do the same.
– Conduct appropriate due diligence with respect to risks to human rights and the environment by identifying actual and potential impacts, take measures to prevent and cease existing violations, and report on such measures. These obligations extend to controlled companies (subsidiaries and suppliers).
– Accept liability for damage caused by companies under their control by violation of internationally recognized human rights and international environmental standards in the course of business, unless they prove to have complied with their due diligence obligations (reversal of the burden of proof).

The Swiss Parliament supports the main goal of the initiative that is the respect for human rights and the environmental through business, but concluded that the initiative went too far and would significantly weaken the attractiveness for Switzerland as a business hub. Instead, it supports the indirect counter-proposal.

2. Key elements of the indirect counter-proposal

Non-financial reporting duties

A new proposed provision in article 964bis ff. of the Swiss Code of Obligations would require public companies, banks, insurance companies and other supervised companies in the financial sector, which together with controlled companies in Switzerland and abroad (the Group) :
(i) have at least 500 full-time employees on annual average, and
(ii) exceed either total assets of CHF 20 million or revenues of CHF 40 million, to report annually on non-financial matters in a separate report.
These provisions are in line with the Non-Financial Reporting Directive of the EU.

The report must contain information necessary to understand the Group’s business development, performance, position and impact of its activity on environmental (incl. CO2 targets), social, employee, human rights and anti-corruption topics. The report has to include but is not limited to a description of :
(i) the business model,
(ii) policies pursued and due diligence carried out,
(iii) main risks resulting from the Group’s own operations and, where relevant and proportionate, from its business relationships, products or services,
(iv) measures taken and assessed, and
(v) the main non-financial key performance indicators.

The report may be based on national, European or international reporting standards, such as the OECD guidelines for multinational enterprises or the standards of the Global Reporting Initiative (GRI) among others. A reporting company may choose not to report on topics with respect to which the Group does not pursue policies. This would, however, require the report to provide a clear and reasoned explanation. Furthermore, the report is subject to approval by the board of directors and by the general meeting of shareholders but it does not need to be audited.

Due diligence obligations in connection with conflict minerals and child labor

Swiss Companies that (i) import or process minerals or metals containing tin, tantalum, tungsten or gold from conflict or high-risk areas, or (ii) offer products or services where there are reasonable grounds to suspect that child labor was involved, are subject to special due diligence and related reporting obligations with respect to their supply chain. The Federal Council may define certain exceptions.
Companies would be required to implement a management system with a defined supply chain policy and a system to trace back the supply chain, identify and assess actual and potential risks of adverse impacts in their supply chain, implement a risk management plan with measures to prevent or mitigate such risks, and issue an annual report on the compliance with these obligations. Additionally, companies importing or processing minerals or metals must appoint an independent third party to carry out audits on the compliance with the abovementioned obligations.

As far as criminal liability is concerned, the proposed provisions foresee that anyone who makes false statements in, or fails to provide, a required non-financial report will be fined with up to CHF 100’000.

Florence Schurch
Secretary general of STSA, is at your disposal to answer your questions:
+41 22 715 29 90 / florence.schurch@stsaswiss.ch

Quest’anno la Lugano Commodity Trading Association (LCTA) festeggia il suo 10° anniversario. La LCTA è un’associazione senza scopo di lucro e riunisce operatori che ruotano attorno all’ambito del commercio di materie prime, delle spedizioni, delle assicurazioni e del finanziamento di questo settore. Per commentare la crescita e l’evoluzione dell’associazione abbiamo intervistato il presidente, Thomas Patrick.

Cosa ha fatto la LCTA per l’industria del commodity trading nel corso degli anni?

La LCTA è stata costituita nel 2010 originariamente come associazione di otto membri tutti attivi nel settore delle materie prime con l’obiettivo primario iniziale di migliorare la comprensione dell’indotto economico del commodity trading in Ticino. Il commercio di materie prime non gode del riconoscimento di un marchio e come tale non dipende dalla pubblicità come mezzo di marketing per la vendita di prodotti; ciò rende il settore esclusivamente privato. Le aziende di materie prime sono raramente quotate in borsa (Glencore fa eccezione) e la maggioranza è detenuta da privati, spesso anche con la formula dei manager-azionisti. Tra gli altri soggetti interessati vi sono le banche, le compagnie di assicurazione, i broker navali, i centri logistici e gli spedizionieri, senza i quali il settore non potrebbe operare. La base di conoscenza del business è affidata a queste società e organizzazioni partner, che operano in modo riservato, data la complessità e la natura particolare delle operazioni gestite dai commercianti di materie prime. Non essendoci un marchio riconosciuto, le aziende devono distinguersi attraverso la qualità del servizio e le competenze di gestione del rischio. Non è comune per le aziende del settore delle materie prime cooperare a causa della sensibilità delle informazioni su prezzi e clienti. È proprio qui che la LCTA entra come importante canale di comunicazione e di formazione all’interno del settore delle materie prime. La LCTA ha stabilito una voce comune per i suoi membri che può essere più chiaramente compresa quando rappresenta il settore di fronte alle autorità locali, regionali e federali.

Quindi la LCTA si occupa anche di formazione?

Certo. Una serie di competenze altamente sviluppate è necessaria per spostare le materie prime in modo efficiente e sicuro attraverso la catena di approvvigionamento, che dipende più dai professionisti che non dalle infrastrutture. La LCTA organizza una serie di moduli di formazione annuali o corsi aperti al personale dei membri dell’associazione per ampliare o adattare le loro conoscenze operative. La LCTA, inoltre, offre una borsa di studio ad almeno un candidato iscritto al corso di studi avanzati per professionisti delle materie prime (CAS Commodity Professional) dell’Università di Lucerna, in collaborazione con la LCTA e la Zug Commodity Association. L’investimento nello sviluppo delle competenze e nella formazione superiore incentrata sulle materie prime è fondamentale per l’importanza che i professionisti rivestono nel successo del business delle materie prime.

Come si è evoluta la LCTA negli ultimi 10 anni? 

Come detto, la LCTA è stata costituta nel 2010 con 8 membri fondatori. Oggi i membri sono saliti a 58 e coprono un’ampia gamma di attività che comprende: commercio di energia, carbone e metalli; raffinazione di metalli preziosi; assicurazioni e banche; spedizioni e trasporto di materie prime.

Vi è una significativa concentrazione di aziende attive nel settore delle materie prime sia a Ginevra sia a Zugo, rappresentate rispettivamente dalla Swiss Trading & Shipping Association (STSA) e dalla Zug Commodity Association (ZCA). Nel 2015 la STSA si è affermata come associazione mantello per l’intero settore svizzero delle materie prime, la LCTA e la ZCA aderiscono come membri istituzionali. Si è trattato di uno sviluppo importante, data la necessità di affrontare collettivamente le questioni a livello federale, con la STSA nella posizione migliore per affrontarle.

Quanto è importante il commercio di materie prime per il Canton Ticino?

Il carattere privato delle aziende di materie prime rende difficile valutare appieno il contributo economico apportato collettivamente dalle imprese attive nel settore. In Ticino stimiamo che le aziende attive nel settore delle materie prime siano pressappoco 120 con circa 75 milioni di franchi di gettito fiscale e contribuiscano in maniera importante al PIL del Cantone. Nel contesto internazionale la Svizzera è il più grande hub mondiale per il commercio di materie prime. La sua quota di mercato globale è stimata al 35% per il petrolio, al 60% per i metalli e al 50% per lo zucchero e i cereali. Alcune delle maggiori aziende mondiali sono imprese di commercio di materie prime domiciliate in Svizzera. Non va sottovalutata l’importanza del settore per una circolazione globale sicura ed efficiente delle merci.

Dopo più di un decennio di globalizzazione che ha promosso l’apertura dei mercati e la riduzione delle barriere commerciali, l’attuale movimento è caratterizzato dalla sfida di azioni protezionistiche e dal ridimensionamento delle politiche nazionaliste che invocano tariffe e quote che sono complesse per l’attività dei commercianti di materie prime. Il ruolo del trader di materie prime rimane essenziale per lo spostamento delle merci e la gestione di tutti i rischi, ma la difficoltà di gestione oggi significa che possono sopravvivere meno le piccole aziende. Si tratta meno del commercio e più della spedizione e dello stoccaggio delle merci, dell’attenuazione del rischio di pagamento e della capacità di finanziare una catena di approvvigionamento estesa. Questo rende la LCTA e le sue associazioni affiliate più importanti come luogo in cui le informazioni possono essere condivise tra i membri e le competenze sviluppate per affrontare le sfide di un mercato in continua evoluzione.

Qual è il suo augurio per la LCTA per il suo 10° anniversario?

Questo è il decimo anniversario della LCTA, che purtroppo è segnato dal più minaccioso allarme per la salute pubblica della nostra vita. Anche se non c’è dubbio che sopravvivremo alla crisi sanitaria, è probabile che la “nuova normalità” rifletterà un cambiamento nel comportamento sia personale sia professionale. Sono un ottimista per natura e credo che il cambiamento di comportamento sarà in meglio e non in peggio. Per la LCTA credo e spero che l’associazione sarà resa una piattaforma ancora più forte e fornirà un canale ancora più vigoroso per la condivisione di informazioni tra i suoi membri, così come una voce più forte per educare il pubblico sull’importanza del settore per lo spostamento dei beni di base dalla fonte di origine o produzione al punto di consumo.

On March 25, the Federal Council adopted an emergency ordinance on granting of credits with joint and several federal guarantees. Bridging credit facilities representing a maximum of 10% of their annual turnover and no more than CHF 20 million. Credits of up to CHF 500,000 will be fully secured by the Confederation, and will be paid out quickly and with the minimum of bureaucracy. Zero interest will be charged.
Credit application form: covid19.easygov.swiss

Bridging credits that exceed CHF 500,000 will be secured by the Confederation to 85% of their value; the lending bank will secure the remaining 15%. Each company can obtain a credit of this type for up to CHF 20 million, which means a more rigorous bank review will be required. The interest rate on these credits is currently 0.5% on the loan secured by the Confederation. Companies with a turnover of more than CHF 500 million are not covered by this programme.

Dear Members of LCTA,

we would like to inform you that in March/April we received several emails and phone calls from LCTA members complaining that the measures implemented by the Swiss Confederation discriminate against trading companies. On the one side, discrimination on the access criteria; on the other side, discrimination on the criteria to establish the amount to be assigned.

Access Criterion

In fact, the “emergency ordinance on granting credits with joint and several federal guarantees” adopted by the Federal Council is discriminating against small trading companies that are not big enough to face the crisis alone and that unfortunately are not small enough to be supported by Confederation. Matter-of-factly, companies with a turnover <500 M CHF has no right to be supported by Confederations for these specific credits/guarantees; as you know, we are talking about companies with big turnovers (>500 M CHF), very small margins and not more than 20-30 employees.

Loan Amount Criterion

Also criteria to establish the amount to be assigned to companies (Covid19 credit and Covid19 plus credit) have arisen some doubts regarding the treatment of trading companies. According to the Federal Ordinance (25.03.2020), in the case of trading companies the benchmark for granting a Covid19-loan is turnover, while according to the Swiss Banking Association point 22 of the “SBA Q&A” (as of 02.04.2020) the benchmark is gross margin*. Obviously, for a loan to a company with CHF 30 million in turnover, there is a big difference between 10% of turnover (or CHF 3 million) and the gross margin* (in optimistic cases around 2%, or CHF 0.6 million). In addition, there are general indications or obligations (“it is appropriate or mandatory”?).

It is also a question of consistency: if for trading companies the gross margin criterion is used instead of turnover, then the access criterion must also be based on the gross margin criterion and not on the turnover criterion. This is a double standard case.

Our association (STSA, LCTA and ZCA) wrote a letter to federal authorities as well as to the Swiss banking association in order do have an official reply. This is an important occasion to remember that not all trading companies are giants and that there is a relevant number of the operators that was and is still negatively affected by this Covid-crisis without having the same rights of other similar companies.

*For the “Commodity Trade Finance” sector, which turnover parameters should be taken into account? (New question published on March 31, 2020): Traders in principle have high turnover figures. The use of annual turnover as a benchmark could therefore result in disproportionate amounts of credit being granted. In order to comply with the actual purpose of the transitional credit programme, the gross margin / gross trade margin should therefore be used. The gross trade margin is also used to cover salary costs and fixed and variable expenses.

Contribution by EY.

Spreading contagion – coronavirus effects on the working world

The rapidly evolving threat around the COVID-19 virus has raised concerns among the business and investor community across the world. The global and interconnected nature of today’s business environment poses serious risk of disruption of global supply chains that can result in significant loss of revenue and adversely impact global economies.

Enterprise response

As the uncertainty around the evolving event persists, we are starting to see companies take measured approaches to safeguard employees and mitigate financial and operational exposure. Companies and governments around the world continue to closely monitor the situation.

While cyber risk is a relatively recent consideration in resilience planning, companies have long maintained various resilience plans for business continuity, disaster recovery, and crisis management. These plans, while effective for a range of business disruptions, may fall short during a global crisis such as coronavirus or other pandemic events. Moreover, companies typically have less incentive to invest in distinct pandemic management capabilities since pandemics are lower-probability events (the last major pandemic, H1N1 influenza or swine flu, occurred in 2009). And while firms likely refreshed resilience plans in response to the H1N1 pandemic, it is important to consider differences in today’s environment. Companies must think through the implications to their businesses and develop specific crisis management annexures around pandemic threats.

Importance of pandemic planning – why traditional resilience plans are not sufficient to address pandemic-related disruptions

The differences between business disruptions that are caused by natural, human-made, technology or operational failures and those caused by pandemic events persist due to the potential increased scale, severity and duration of pandemic events, necessitating the need for organizations to expand beyond traditional resilience planning strategies. Companies must incorporate pandemic planning considerations into existing resilience management activities to provide a comprehensive response and to provide continuity for their most critical products and services. Additionally, companies should consider establishing pandemic-specific policies and procedures, capabilities for employee communications, telecommuting and personal/family leave to minimize disruptions.

Key takeaways – how to plan and respond differently to pandemics versus traditional resilience planning

Apply a people-first mindset: The very first priority of an organization during a pandemic should be the safety and well-being of its workforce. Employees are unable to focus on work responsibilities when their well-being and that of their family are in peril. It is important for companies to be able to monitor the situation, provide a safe workplace and offer their employees the support that they need. Examples of employee support may include providing access to internal and external resources (e.g., World Health Organization, International SOS, Centers for Disease Control and Prevention), services (e.g., extended child/elder care, transport for late hours) and recognition for employees who take on work for other areas, communicating timely updates to raise awareness and establishing employee standard of care services where possible to provide support to sick personnel or those that are caring for sick household members. To enable timely two-way communication and employee tracking and to disseminate critical information, companies must validate that emergency notification systems are in place and tested on a routine basis. In addition, companies should deliver pandemic-related training to enhance employee preparedness and alleviate any concerns.

Plan for geographical segmentation of functions and activities: A pandemic can have severe consequences in impacted areas and geographies, making them inaccessible for an extended period of time. As a component of a business impact analysis, companies identify the chain of activities and functions, along with interdependencies (e.g., people, process, technology, data, facilities, third parties) and related impacts, to inform potential mitigation strategies. From a pandemic planning perspective, companies should pay closer attention to the geographical concentration of these critical activities and functions, and how to segment them for work transfer to alternate locations and sites. As prudent risk management and to the extent possible, companies should look to diversify supplier base, customers and third-party service providers across geographies to avoid single points of failure.

Invest in technology and infrastructure to support remote work and virtual collaboration capabilities: A pandemic requires employees to stay home to limit exposure and to prevent or slow down the spread of the disease, requiring the activation of remote working capabilities. A pandemic may lead to a complete shutdown of the entire facility in an area, forcing a high number of employees to work remotely for an extended duration. This may in turn result in heavier-than-normal traffic on remote connectivity networks, causing capacity and load access issues. Companies should invest in tools to enable personnel to work remotely and collaborate virtually, perform periodic network stress testing and identify workarounds for critical tasks that are not executable from home. It is worth noting that remote working is a not viable option for manufacturing, thus resulting in critical impacts on product supply chains.

Consider the systemic nature of pandemics when designing response strategies: Companies must challenge and stretch the boundaries for traditional resilience plans to address pandemic events and carefully design distinct strategies; for instance, inter-affiliate contracts to subcontract work to or alternate supply chain vendors to overcome these barriers. Companies should validate that contracts between country-to-country affiliates are in place to reduce uncertainty of terms, rates, payments and regulatory requirements; data-sharing agreements are addressed within the contracts (e.g., General Data Protection Regulation requirements); and, as required in regulated industries, appropriate licenses are in place to conduct the additional work. Further, downstream dependencies should be considered. For example, if contractor onboarding is concentrated in the impacted region, capabilities in other locations that could be quickly mobilized should be entertained.

Assess reliance on third parties: Companies today have increased interconnectedness with third parties, which are also vulnerable to pandemic events. Companies must develop a thorough understanding of their critical third, fourth and fifth parties, and their resilience programs, and develop alternate plans, for instance insource strategies or substitutability, if the critical third party’s ability to perform services is impaired. Companies should also validate alignment between their alternate plans and those of their third parties. However, companies must recognize that their peers and competitors may look to the same third parties for assistance during a market contagion, leading to concentration risk. Where possible, companies must explore opportunities to embed contractual clauses that allow them to be prioritized for products and services in relation to their competitors.

Engage with customers: Customers are generally more empathetic to degradation or discontinuation of certain products and services during disruptions that are beyond a company’s control and involve life safety concerns than they are toward those that are perceived to be preventable (e.g., system glitches). However, they expect transparency and timely updates. Customers may have specific questions around a company’s supply chain, especially if resources are located in impacted areas, and also may have questions around how those resources may pose any potential risks to them for future use of the company’s products and services. A clearly drafted frequently-asked-questions document published and disseminated through multiple channels, including the company’s website and social media, can prove to be a useful tool to proactively address customer concerns.

Develop a robust communication strategy (including social media): Effective communications during any crisis are crucial to maintaining customer trust, restoring employee morale and confidence, and retaining market stability. For companies that have both retail and corporate customers, consistent messaging is key. All channels must reconcile (e.g., social media, customer call centers, public relations releases). Additionally, events like a pandemic can add another layer of complexity due to circulation of false news and narratives on social media. Companies must establish a robust communications strategy that clearly lays out process and protocols to engage with a wide set of stakeholders inclusive of any legal and jurisdictional considerations. For highly regulated industries such as financial services, health care, and power and utilities, companies should determine and comply with applicable federal, state and local reporting requirements (e.g., disclosure of material risks and impacts), and have a process in place to notify and engage with regulators proactively across various jurisdictions.

Team with public sector; national, state and local agencies; and health officials: Pandemics are a public issue first and a business issue second. Hence, it is important for the public and private sector to come together to provide an adequate and comprehensive response to a pandemic event. Companies must leverage advisories, resources and health safety measures prescribed by international, national and local agencies and health officials, and refrain from distributing conflicting materials as this can lead to confusion and fear among employees. Companies may set up matching-grant and other financial assistance programs to help employees and communities in financial distress during this time.

Increase rigor and complexity of testing: Companies must elevate the complexity of existing scenarios used for testing and simulations to assess preparedness for pandemic events. In addition, companies must rehearse crisis management governance and response, including C-suite executives and delegations of authority at least two levels down from primary decision-makers, so that delegates are well prepared to execute timely decisions in the event primary decision-makers are not available. Companies should also include critical third parties in select tabletop simulations to gain a better understanding of interdependencies and points of coordination, and to assess effectiveness of their resilience plans.

Leverage pandemic command center to prioritize and govern effectively: As time goes by, a widespread pandemic event will assert more pressure on existing resources, infrastructure and technology. As resources become constrained, firms must constantly re-prioritize delivery of products and services that are absolutely critical to meet customer needs and provide market stability. Equally important is a thorough understanding of activities that must be de-prioritized to allow effective repositioning of available resources. Companies must have a clearly documented prioritization framework, inclusive of associated risk tolerances, supported by a robust governance process to make risk acceptance decisions (e.g., discontinuation of certain services) during an event.

Establish crisis management exception approval process: In the event of a crisis, there are instances when companies need to deviate from standard policies and procedures to best meet the needs of their customers and employees. For instance, a company may not support or have stringent policies with regard to overtime or remote work, corporate card usage and so on during the normal course of the business; however, these policy exceptions may be necessary and permissible during an actual crisis. All potential changes to existing policies should be carefully reviewed by risk management, compliance and legal prior to being finalized and should take into account what risks are appropriate to accept.

What should companies do now?

1. Communicate with employees to raise awareness, enforce policies (e.g., travel restrictions) and familiarize them with available tools and resources
2. If pandemic planning considerations have not been incorporated into existing business continuity and disaster recovery strategies or updated, begin rapid planning or refresh of pandemic strategies and actions
3. Perform an immediate assessment of processes and functions with high manual intervention and critical third-party dependencies, especially in high-vulnerability and impact locations, to understand key risks, including any single points of failure
4. Review crisis communication plan and designate single points of contact to facilitate seamless engagement with local, national and global authorities, and other key internal and external stakeholders
5. Identify potential policy exceptions and institute a crisis management exception approval process to manage such exceptions on an accelerated basis in each jurisdiction
6. Confirm employees have the requisite capabilities, including access to requisite share drives, documents and other critical tools, to perform critical tasks remotely
7. Review relevant standard operating procedures and manuals and update them, as necessary
8. Monitor the situation and provide regular briefings to leaders on any emerging threats and issues
9. Ask employees to confirm and update contact information (primary and secondary) in company records, as necessary
10. Conduct brief pandemic training with employees to enhance employee and organizational preparedness to respond effectively

Contacts

Alessandro Cataldo, Ernst & Young Ltd, Lugano
Partner, Transaction Advisory Services

alessandro.cataldo@ch.ey.com

Fabio Nani, Ernst & Young Ltd, Lugano
Executive Director, Transaction Advisory Services

fabio.nani@ch.ey.com

Contribution by Euler Hermes.

The hit to China’s GDP y/y growth caused by 2019-nCoV (Coronavirus) could amount to c. 1pp, mostly over Q1 2020. A recovery should thereafter be possible, based on pent-up production and policy support.

A protracted pause in Chinese activity could be disruptive for certain supply chains such as chemicals, transport equipment, textile and electronics.

If we look into the impact on the rest of the world: manufacturing and trade recessions are likely to continue, with a trade shock of USD26bn per week from the lockdowns in China and global growth barely staying afloat at +2% in Q1 2020.

First, the coronavirus outbreak is likely to keep the manufacturing sector in recession in H1 2020. Electronics and computers are most at risk. With the business interruption in China caused by the coronavirus epidemic, — which has put several sectors at risk of supply chain disruption and lower global demand — above long-term average stocks could increase further in sectors such as textiles, machinery and transport equipment and commodities. Meanwhile, goods’ shortages are a risk in sectors with below long-term average stocks (electronics, computers). In 2019, companies’ unusually high levels of stocks pushed manufacturing production into recession, notably in the advanced economies.  With the stock absorption over the past few months being only partial, the lower global demand and the higher uncertainty are likely to push inventories up in the coming months. Hence, we expect the global manufacturing sector to remain in (shallow) recession in H1 2020.

Second, potential losses of exports of goods and services to China could amount to USD26bn per week as production and trade are paused. We have revised down our global trade growth forecast for 2020 by -0.5pp to +1.3%. Hong Kong, the U.S., Japan, South Korea and Germany are most exposed. This weekly loss is more than the effect of the U.S.-China trade feud in 2019 (0.7pp). In terms of goods, the most exposed countries are Hong Kong, South Korea, Japan, Germany and the U.S. The cost could be USD18bn weekly.

Last, the macroeconomic impact should remain contained (-0.3pp on global GDP growth in Q1 2020 to +2%), if the business interruption in China doesn’t last for more than one month and business activity returns to normal after three months. While we think that the negative spillovers from the coronavirus epidemic will not last for more than three months, we doubt the global economy is strong enough to catch up entirely after the loss, given that the growth acceleration in H2 will be capped by U.S.-driven uncertainty. Overall, we think the recession in the manufacturing sector and global trade in goods will be prolonged into H1. Hence, we have revised our 2020 global GDP growth forecast by -0.1pp to +2.3%, based on a revised forecast for China (+5.6%, i.e. -0.3pp), the Eurozone (+0.9%, i.e. -0.1pp) and several other economies. We expect monetary policies to remain very active, with the ECB and the Fed even more likely to implement another rate cut in H1 2020, given that the “isolation” of China amid the coronavirus outbreak is likely to have strong negative impacts on both trade in goods and services.

Marco Arrighini 
Senior Sales Manager

Euler Hermes Switzerland | Via A. Adamini 10A | CH-6900 Lugano | Switzerland

marco.arrighini@eulerhermes.com
www.eulerhermes.ch 
t +41 91 922 73 64
m +41 79 501 43 44