Belt and Road

Belt and Road provides exporters with a brief analysis of political and economic risks for the countries under the Belt and Road Initiative.


Key Information

Capital

Sofia

Population

7.4 million

Area

110,879 sq km

Currency

Bulgarian Lev (pegged to euro at 1.96 BGN = 1 EUR)

Official language

Bulgarian

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 50 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 49 out of 137 in 2017/18 (1)

Logistics Performance Index by World Bank

# 72 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (55.8%)

Manufactured goods (63.0%)

Fuels and mining products (24.4%)

Fuels and mining products (24.3%)

Agricultural products (17.3%)

Agricultural products (11.1%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

European Union (66.8%)

European Union (66.1%)

Turkey (8.0%)

Russia (8.9%)

Serbia (1.9%)

Turkey (6.2%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Bulgaria ended the communist regime in 1989 and adopted parliamentary democracy based on the revised constitution of 1991. The resignation of the government led by centre-right Citizens for European Development of Bulgaria (CEDB) in November 2016 had triggered a period of political instability. The CEDB came first in a snap parliamentary election and then it formed a new government with United Patriots (UP), an alliance of three nationalist parties, in May. Party leader Boiko Borisov returned as prime minister for the third time since 2009. Although the formation of a new government has ushered in a period of greater stability, policy differences between coalition partners might undermine the government.

Bulgaria joined the European Union (EU) in 2007. The EU has continued to demand Bulgaria to step-up the implementation of judicial reforms and put greater efforts in combating corruption and organized crime. In the meantime, migrant flows are an issue as Bulgaria is one of the main transit points for the more than a million migrants who have entered Europe from the Middle East and North Africa. In an attempt to prevent illegal crossings, the country built a fence on its border with Turkey and reinforced its border controls.

Economic Trend

* Estimates  ^ Forecasts

Source: Economist Intelligence Unit

 

Following the end of the communist rule, Bulgaria has moved from a highly centralized and planned economy to a market-based one, with tourism, information technology and telecommunications, agriculture, pharmaceuticals, and textiles being leading sectors. However, Bulgaria’s economic convergence to average EU income levels is slow -- GDP per capita is only 49% of the EU average, the lowest in the Union.

Real GDP is projected to grow by 3.8% in 2017 and 3.4% in 2018, mostly driven by domestic demand. Private consumption growth is set to moderate, while investment should continue to boost the economy as the absorption of EU funds under the 2014-2020 EU programming period is expected to accelerate.

Over the past decade Bulgaria has been actively developing as one of the leading global destinations for outsourcing, in particular the IT and customer service sectors, owing to its geographical location in the centre of southeastern Europe, abundant supply of low costs and multilingual workers, and a favourable tax policy. Currently, Bulgaria is not a member of the euro area, and there is no target date for the country to join the currency bloc. Instead, it is maintaining a currency board regime which pegged its currency Lev to euro at a fixed rate.

Hong Kong – Bulgaria Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Bulgaria increased by 36.0% from HK$497 million in 2015 to HK$676 million in 2016. The top three export categories to the Bulgaria were: (1) telecommunications, audio & video equipment (+78.0%), (2) electrical machinery, apparatus & appliances, & parts (+12.4%), and (3) office machines & computers (+20.0%), which represented 84.2% of total exports to Bulgaria.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Bulgarian buyers. Currently, the insured buyers in Bulgaria are mainly small and medium sized companies. For 2016, the number of credit limit applications on Bulgaria increased by 5.3%, while the amount of credit limit applications decreased by 35.3%. Insured business increased by 3.1%. Major insured products were electronics, mineral products and electrical appliances, which represented 93.4% of ECIC’s insured business on Bulgaria. The Corporation’s underwriting experience on Bulgaria has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (December 2016 to November 2017).

Please click here to download the charts (PDF format).

 

 

Last update: 29 December 2017

 



 

Key Information

 

Capital

Rabat

 

Population

35.2 million

 

Area

446,550 sq km

 

Currency

Moroccan dirham (pegged to a basket of euro and USD, 1 MAD = 0.1064 USD as of 28 December 2017)

 

Official language

Arabic, Berber

 

Form of government

Parliamentary constitutional monarchy

 

Ease of doing business by World Bank

# 69 out of 190 in 2018

 

The Global Competitiveness Index by the World Economic Forum

# 71 out of 137 in 2017/18 (1)

 

Logistics Performance Index by World Bank

# 86 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Manufactured goods (68.7%)

Manufactured goods (64.2%)

 

Agricultural products (21.0%)

Fuels and mining products (22.5%)

 

Fuels and mining products (10.3%)

Agricultural products (13.0%)

 

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

 

European Union (64.9%)

European Union (55.6%)

 

USA (3.5%)

China (9.1%)

 

India (3.3%)

USA (6.4%)

 

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

 

Political Highlights

 

King Mohammed VI in 2011 responded to the spread of pro-democracy movements in the region by implementing a reform program that included a new constitution, under which some powers are extended to parliament and the prime minister but ultimate authority remains in the hands of the monarch. Saad-Eddine El Othmani from the Justice and Development Party was appointed prime minister in March 2017 and a coalition government was formed.

The government’s top priority is to shore up public finances by reducing macroeconomic imbalances. Given the high unemployment rate at around 10% in recent years, authorities will step up efforts to create new jobs and improve the quality of the education system. In the meantime, Morocco is facing threats to social stability, especially from the northern Rif region, where public resentment over perceived corruption and economic inequality has sparked recurring protests since late 2016.  

Morocco was a French protectorate from 1912 to 1956 and Franco-Moroccan relations remain strong. Diplomatic ties with the European Union is expected to come under periodic strain due to disputes over the status of Western Sahara, but they are likely to maintain close cooperation, given Morocco's key role in regional counterterrorism efforts and its position as a departure point for migrants heading to Europe.

Economic Trend

* Estimates ^Forecasts

Source: Economist Intelligence Unit

Morocco has capitalized on its proximity to Europe and relatively low labor costs to attract foreign investment, and benefited from a commitment to economic reforms that encourage the development of private sector. It has a large tourism industry, a growing manufacturing sector, and a nascent aeronautics industry, but economic performance is still sensitive to agriculture, which accounts for around 15% of GDP. Despite government efforts to improve irrigation, agricultural production remains heavily reliant on volatile rainfall.

Following 2016’s drought, economic growth picked up in 2017 and is expected to reach 4.4%, mostly driven by a significant rebound in agricultural activity, while non-agricultural activity remained subdued. For 2018, economic growth is forecast to slow to 3.1%, as weather conditions are likely to be less favorable. Long-term prospect will hinge on continued implementation of reforms regarding labor market efficiency, access to finance, quality of education, and further improvements to the business environment.

The implementation of prudent macroeconomic policies has helped reduce macroeconomic imbalances in recent years. With continued sizable foreign direct investment (FDI) inflows, Morocco’s foreign exchange reserves are expected to remain at a comfortable level of around six months of imports of goods and services.

 

Hong Kong – Morocco Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Morocco increased by 3.5% from HK$819 million in 2015 to HK$847 million in 2016. The top three export categories to Morocco were: (1) telecommunications, audio & video equipment (+13.5%), (2) office machines & computers (-26.2%), and (3) electrical machinery, apparatus & appliances, & parts (+2.5%), which represented 84.7% of total exports to Morocco.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Moroccan buyers. Currently, the insured buyers in Morocco are mainly small and medium sized companies. For 2016, the number and the amount of credit limit applications on Morocco increased by 137.5% and 37.0% respectively, while the insured business decreased by 1.5%. Major insured products were electrical appliances, jewellery and metallic products, which represented 89.3% of ECIC’s insured business on Morocco. The Corporation’s underwriting experience on Morocco has been satisfactory, with no payment difficulty or claim payment case reported during the past 12 months (December 2016 to November 2017).

 

Please click here to download the charts (PDF format).

 

Last update: 28 December 2017


 

Key Information

 

Capital

Zagreb

 

Population

4.2 million

 

Area

56,594 sq km

 

Currency

Croatian Kuna (1 HRK = 0.1583 USD or 0.1326 EUR as of 28 December 2017)

 

Official language

Croatian

 

Form of government

Parliamentary republic

 

Ease of doing business by World Bank

# 51 out of 190 in 2018

 

The Global Competitiveness Index by the World Economic Forum

# 74 out of 137 in 2017/18 (no change)

 

Logistics Performance Index by World Bank

# 51 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Manufactured goods (65.8%)

Manufactured goods (67.9%)

 

Agricultural products (18.9%)

Fuels and mining products (17.5%)

 

Fuels and mining products (13.9%)

Agricultural products (14.5%)

 

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

 

European Union (66.3%)

European Union (77.2%)

 

Bosnia and Herzegovina (9.2%)

China (3.0%)

 

Serbia (4.8%)

Bosnia and Herzegovina (2.9%)

 

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Following the collapse of the collation government comprising the centre-right Croatian Democratic Union (HDZ) and Most ("Bridge") party in June 2017, the HDZ managed to avoid an early election by forming a new coalition government with the support of several members of parliament from the liberal Croatian People's Party (HNS). The main priority of Prime Minister Andrej Plenkovic's government is to shore up public finances. However, political uncertainty continues to endanger the much-needed economic reform.

Following a decade-long application process, Croatia joined the European Union (EU) in 2013. The government has been striving to raise the country’s competitiveness in the EU market and maximize the opportunities that membership brings, especially the absorption of EU Structural Funds. It will, however, need to deliver reforms urged by the EU in areas such as the labor market, public administration and fiscal consolidation.

Economic Trend

*Estimates ^ Forecasts

Source: Economist Intelligence Unit

 

Croatia is a service-based economy. Tourism is a major economic sector, with its revenues representing around 15% of the country’s GDP. After six years of recession, Croatia returned to economic growth in 2015. In 2017, real GDP grew by an estimated 3.0%, mainly driven by private consumption thanks to tax cuts and increases in minimum and public-sector wages.

Despite sizable fiscal consolidation, Croatia’s macroeconomic stability remains a concern as public and external debt levels are still high. On the positive side, budget deficit has been narrowing which allowed Croatia to exit the EU’s Excessive Deficit Procedure in June 2017.

Although Croatia has a relatively small domestic market and is not particularly well endowed with natural resources, the country's location provides it with several advantages. It is close to important markets such as Germany and Italy, and through its borders with Slovenia, Serbia, as well as Bosnia and Herzegovina, it occupies a strategic position between Western Europe and Eastern Europe.

Hong Kong – Croatia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Croatia increased by 41.3% from HK$262 million in 2015 to HK$370 million in 2016. The top three export categories to Croatia were: (1) telecommunications, audio & video equipment (+116.1%), (2) office machines & computers (+39.7%), and (3) photographic apparatus, equipment and supplies and optical goods; watches (-16.1%), which represented 81.2% of total exports to Croatia.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Croatian buyers. The Corporation’s underwriting experience on Croatia has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (December 2016 to November 2017).

 

 

Please click here to download the charts (PDF format).

 

Last update: 28 December 2017



 

Key Information

Capital

Tirana

Population

2.9 million

Area

28,748 sq km

Currency

Albanian Lek (1 ALL = 0.0089 USD as of 27 November 2017)

Official language(s)

Albanian

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 65 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 75 out of 137 in 2017/18 (5)

Logistics Performance Index by World Bank

# 117 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (52.7%)

Manufactured goods (58.6%)

Fuels and mining products (26.5%)

Agricultural products (18.8%)

Agricultural products (10.0%)

Fuels and mining products (11.5%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

European Union (77.9%)

European Union (63.2%)

Serbia (8.7%)

China (8.8%)

China (3.1%)

Turkey (7.9%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Albania is a small, mountainous country located in Southeastern Europe. After almost half-century of communist rule, the country transited to a democracy during the 1990s. In the parliamentary elections held in June 2017, the ruling Socialist Party of Albania (SPA) won by securing 74 out of 140 parliamentary seats. A simple majority allowed the party to govern itself without the need for a coalition partner and lifted constraints on Prime Minister Edi Rama, who previously governed in coalition with the Socialist Movement for Integration.

Albania jointed the North Atlantic Treaty Organization (NATO) in 2009 and became an official candidate for European Union (EU) membership in 2014. It reached another milestone in the process of EU integration with the publication, in November 2016, of the European Commission's latest annual report, which recommended to the European Council that accession talks should be opened with the country, conditioned upon implementation of a judicial reform package. Rama has pledged to push the necessary reforms with the aim of starting the talks in December 2017.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

Albania’s economy is dominated by agriculture, which employs almost half of the workforce, and services, including tourism. Although it remains one of the least developed countries in Europe with GDP per capita at less than one-third of the EU average, inward foreign direct investment has increased significantly in recent years as the government has embarked on reforms to improve the business climate through simplifying licensing requirements and tax codes. The economy is also benefitting from rising domestic demand, growing tourism, and a recovery in key EU trading partners.

On the other hand, weaknesses in public finances pose a challenge for Albania. The country reached a US$400 million loan agreement with the International Monetary Fund in 2014, aimed at controlling the public debt level. After years of fiscal consolidation efforts, budget deficit narrowed sharply to 1.8% of GDP in 2016 and public debt declined from its peak gradually. However, public debt level remains relatively high.

China is Albania’s major trading partner. According to statistics from Chinese Ministry of Commerce, the bilateral trade volume reached US$636 million in 2016, up 13.9% year on year. With its location strategically positioned at a crossroad between east and west, Albania is one of the important stops on China’s Belt and Road Initiative. In April 2017, both countries agreed to enhance cooperation in areas of infrastructure, production capacity, tourism and agriculture under the framework of Belt and Road Initiative.

Hong Kong – Albania Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Albania decreased by 21.4% from HK$75 million in 2015 to HK$59 million in 2016. The top three export categories to Albania were: (1) telecommunications, audio & video equipment (-40.4%), (2) office machines & computers (-12.3%), and (3) footwear (not applicable), which represented 72.0% of total exports to Albania.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Albanian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis.  In the past 12 months (from November 2016 to October 2017), there was no insured business on Albania.

 

 

Please click here to download the charts (PDF format).

 

Last update: 30 November 2017



Key Information

Capital

Beirut

Population

6.0 million

Area

10,452 sq km

Currency

Lebanese pound (Pegged to the USD at 1 USD = 1,506.5 LBP)

Official language(s)

Arabic

Form of government

Republic

Ease of doing business by World Bank

# 133 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 105 out of 137 in 2017/18 (4)

Logistics Performance Index by World Bank

# 82 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufacturing goods (37.8%)

Manufacturing goods (51.8%)

Agricultural products (16.8%)

Fuels and mining products (20.3%)

Fuels and mining products (5.2%)

Agricultural products (18.4%)

Top three export markets (% of total, 2014*)

Top three import markets (% of total, 2014*)

Saudi Arabia (11.4%)

European Union (42.7%)

European Union (11.1%)

China (12.1%)

United Arab Emirates (9.7%)

USA (6.0%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Lebanon has a long history of civil conflicts involving its competing religious and ethnic factions. These factions include the Maronite Christian minority (about one-fifth of the Lebanese population), who are often in conflict with the Muslim majority. The Muslims are themselves divided between the Sunni Muslim and the Shiite Muslim (each taking up about one quarter of the population).

The civil war ended in 1990 after both Christian and Muslim groups agreed to occupy half of the seats in parliament. The presidency is reserved for a Maronite Christian, the Prime Minister post for a Sunni Muslim and the post of parliament speaker for a Shiite Muslim. However, Lebanon’s political climate remains unstable. The civil war in neighbouring Syria has further divided the Lebanese society along religious lines, with many of Lebanon's Sunni Muslims supporting the rebels in Syria, while many Shiites have supported the Syrian President Bashar al-Assad.

Lebanon will continue to struggle with internal divisions, regional instability, refugee influx from Syria (making up about a quarter of the Lebanese population) and a fragile economy. Meanwhile, a new political crisis was triggered by the shocking resignation of Prime Minister Saad Hariri in early November.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

Lebanon is one of the few oil-importing countries in the Middle East. Its economy is primarily based on the services sector, including banking, tourism and financial services; and is reliant on financial support from the Gulf Arab countries. Over the past few years, Lebanon showed weak economic growth amid the long-lasting civil war in Syria and conflicts on national politics.

 

Macroeconomic conditions remain challenging for the country. The influx of refugees from Syria has put heavy pressure on the government’s public finances, which were already weak with large budget and current account deficits, as well as rising public debt. While the level of foreign exchange reserves was sufficient to cover around 20 months of import at the end of July, slowed foreign exchange inflows could put pressures on the reserves.

 

Going forward, an easing of Syria’s war will have a mildly positive effect on Lebanon’s economic growth. Real GDP growth is forecast to accelerate to 1.5% this year with the main driver being services, and tourism in particular. However, the pace of growth in the near term remained uncertain given the domestic political scene and regional instability.

 

Hong Kong – Lebanon Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Lebanon decreased by 19.5% from HK$578 million in 2015 to HK$465 million in 2016. The top three export categories to Lebanon were: (1) clothing & clothing accessories (-8.2%), (2) telecommunications, audio & video equipment (-33.0%), and (3) footwear (-5.4%), which represented 48.5% of total exports to Lebanon.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Lebanese buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Lebanon.

 

 

Please click here to download the charts (PDF format).

 

Last update: 30 November 2017



Key Information

Capital

Kiev

Population

42.5 million

Area

603,550 sq km

Currency

Ukrainian hryvnia (1 UAH = 0.0372 USD as of 28 November 2017)

Official language

Ukrainian

Form of government

Semi-presidential republic

Ease of doing business by World Bank

# 76 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 81 out of 137 in 2017/18 (4)

Logistics Performance Index by World Bank

# 80 out of 160 in 2016

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

Food, beverages & agricultural products (42.0%)

Machinery & equipment (27.7%)

Non-precious metals (22.9%)

Fuel & energy (21.7%)

Machinery & equipment (11.5%)

Chemicals (14.3%)

Top three export countries (% of total, 2016)

Top three import countries (% of total, 2016)

Russia (9.9%)

Russia (12.7%)

Egypt (6.2%)

China (11.6%)

Poland (6.0%)

Germany (10.7%)

Source: Economist Intelligence Unit

 

Political Highlights

 

Ukraine declared independence from the former Soviet Union in 1991 and has since veered between seeking closer integration with Western Europe and being drawn into the orbit of Russia. In 2014, pro-Russian forces annexed the Ukrainian territory of Crimea, after Ukraine's pro-Russian president Viktor Yanukovych scrapped plans to sign a pending Association Agreement with the European Union and was then driven from power by mass protests in Kiev. Crimea, a strategic peninsula jutting into the Black Sea which has a Russian-speaking majority, later voted to join Russia in a referendum that Ukraine and the West deem illegal.

The current pro-Western government is led by Prime Minister Volodymyr Groysman, who is an ally of President Petro Poroshenko. Its policy priorities include restoring the country’s macroeconomic stability and strengthening ties with the European Union (EU). The EU-Ukraine Association Agreement, which aims for closer cooperation in areas such as foreign policy, security, justice, education, science and technology, entered into force on 1 September 2017. Meanwhile, Ukraine seeks to join the North Atlantic Treaty Organization (NATO), the US-led military alliance, and sees it as a security guarantee. President Poroshenko wants to meet NATO entry requirements by 2020 and has promised to hold a referendum on joining.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

During 2014-2015 when Ukraine was wracked by political unrest, the country’s economy contracted by a cumulative 16% due to disruptions of productive and export capacities and significant capital outflows, witnessing sharp currency depreciation, high inflation, dwindling foreign currency reserves as well as ballooning public debts. Under a US$17.5 billion agreement signed with the International Monetary Fund, the government launched a comprehensive set of reforms such as significant fiscal consolidation, moving to a flexible exchange rate, and raising energy prices to market level.

The Ukrainian economy started to recover last year, growing by 2.3%. A budget deficit of 2.2% was comfortably beneath the 3.7% ceiling set by the IMF. The currency also began to stabilize, allowing for a removal of foreign-exchange controls and a build-up in foreign reserves. Inflation has continued to ease, after it reached 48.7% in 2015. In September 2017, Ukraine raised US$3 billion in its first sovereign bond issue since restructuring its debt in 2015, signaling improving investor confidence.

Nevertheless, the overall economic recovery is still weak since it followed a deep contraction. The implementation of some reforms under the IMF programme remains slow, possibly delaying the disbursement of tranches. For instance, inefficient state-owned enterprises still account for a large share of the economy while the agricultural land market remains underdeveloped according to the IMF. Going forward, Ukraine will need to maintain and deepen its reform efforts to achieve sustainable recovery.

 

Hong Kong – Ukraine Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Ukraine increased by 26.6% from HK$906 million in 2015 to HK$1,147 million in 2016. The top three export categories to Ukraine were: (1) telecommunications, audio & video equipment (+41.7%), (2) electrical machinery, apparatus & appliances, & parts (+4.5%), and (3) office machines & computers (+50.5%), which represented 83.3% of total exports to Ukraine.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Ukrainian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Ukraine.

 

 

Please click here to download the charts (PDF format).

 

Last update: 30 November 2017


 

Key Information

Capital

Podgorica

Population

0.63 million

Area

13,812 sq km

Currency

Euro (1 EUR = 1.1902 USD as of 28 November 2017)

Official language

Montenegrin

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 42 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 77 out of 137 in 2017/18 (5)

Logistics Performance Index by World Bank

# 123 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Fuels and mining products (46.2%)

Manufactured goods (60.9%)

Agricultural products (27.5%)

Agricultural products (25.7%)

Manufactured goods (24.9%)

Fuels and mining products (13.3%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

European Union (36.6%)

European Union (48.1%)

Serbia (25.6%)

Serbia (22.3%)

Bosnia and Herzegovina (8.3%)

China (9.0%)

* Most recent year for which data are available

Source: World Trade Organization

Political Highlights

 

Montenegro became an independent sovereign state from the former Union of Serbia and Montenegro following a referendum in 2006. It is a small country located on the Balkan Peninsula bordering Croatia, Bosnia and Serbia. Dusko Markovic replaced close ally and the country’s longtime leader Milo Djukanovic as prime minister in November 2016. He has the support of a narrow majority in parliament made up of his Democratic Party of Socialists (DPS) and parties that represent national minorities. The main policy challenges are to shore up the public finances and rein in the large current-account deficit while trying to spur economic growth.

Markovic has continued his predecessor's policy of moving towards further integration with the West. Montenegro began European Union accession talks in 2012 and is making steady progress in the negotiations. In June 2017, it became the 29th member of the North Atlantic Treaty Organization (NATO), a US-led military alliance. However, Russia opposes Montenegro's membership of NATO, claiming that NATO's continued expansion poses a threat to its sphere of influence.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

Montenegro is a small, open economy which relies on tourism and capital inflows from abroad to stimulate economic growth. Following growth of 2.5% in 2016, real GDP growth is forecast to accelerate to 3% in 2017 on the back of robust consumer demand and the implementation of large investment projects, including the construction of the Bar-Boljare Highway (a three-phase project to connect Montenegro and Serbia).

The implementation of mega infrastructure projects has contributed to high budget deficits and rising government debt. The current account deficit is large due to the rising construction-related imports. In the latest Progress Report on Montenegro, European Commission raised concerns about the country’s macroeconomic stability. Subsequently, the government has embarked on a path of fiscal consolidation, aiming to reduce government debt to 66% of GDP by 2020.

Montenegro adopts the euro as its domestic currency though it is not an official member of the eurozone, and the central bank cannot create currency and liquidity on its own. The euroization of the economy on one hand restricts Montenegro’s monetary authority, but on the other hand helps avoid a sudden stop in capital inflows motivated by fear of devaluation; and makes commercial integration with the European Union easier because it eliminates the transaction costs associated with currency exchange.

 

Hong Kong – Montenegro Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Montenegro increased by 22.6% from HK$45 million in 2015 to HK$55 million in 2016. The top three export categories to Montenegro were: (1) telecommunications, audio & video equipment (+40.6%), (2) tobacco and tobacco manufactures (+100.7%), and (3) photographic apparatus, equipment and supplies and optical goods, nes; watches and clocks (+9.5%), which represented 91.8% of total exports to Montenegro.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Montenegrin buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Montenegro.

 

 

Please click here to download the charts (PDF format).

 

Last update: 29 November 2017

 


Key Information

 

Capital

Sarajevo

 

Population

3.5 million

 

Area

51,197 sq km

 

Currency

Bosnia-Herzegovina Convertible Mark (pegged with euro at 1 EUR = 1.95583 BAM)

 

Official language

Bosnian, Croatian and Serbian

 

Form of government

Parliamentary republic

 

Ease of doing business by World Bank

# 86 out of 190 in 2018

 

The Global Competitiveness Index by the World Economic Forum

# 103 out of 137 in 2017/18 (4)

 

Logistics Performance Index by World Bank

# 97 out of 160 in 2016

 

Source: Economist Intelligence Unit

 

Political Highlights

 

Bosnia and Herzegovina (BH) is a country on the Balkan Peninsula. It has three main ethnic groups, which are Bosniaks (Bosnian Muslims), Croats and Serbs. Ethnic divisions have long been posing risks to political stability. With regards to political structure, two separate “entities” exist under a central government: the Bosniak-Croat Federation of Bosnia and Herzegovina (about 51% of the territory), and the Bosnian Serb Republic (about 49% of the territory). They enjoy substantial autonomy, each with its own government, parliament, police and other bodies. This complicated political structure affects governance efficiency. The next general elections both at the central level and at the level of the two entities are due in October 2018.

BH received a North Atlantic Treaty Organization (NATO) Membership Action Plan in 2010 and is an official candidate for NATO membership. On European Union (EU) accession, the country formally requested to join the EU in February 2016. However, due to a highly decentralized government, a lack of consensus among politicians concerning the adoption of reforms required by the EU, as well as inter-ethnic divergences, the process of EU integration will continue to be delayed.

Economic Trend


* Estimates

Source: International Monetary Fund (IMF)

The economy of BH relies heavily on the export of metals, energy, textiles, and furniture as well as on remittances and foreign aids. However, complex government structure and underdeveloped institutions have created significant obstacles to foreign direct investment, and have also hampered economic policy coordination and reform.

In September 2016, the International Monetary Fund approved a three-year EUR 553 million loan agreement to support the country’s economic reform agenda. BH needs to implement a set of reforms, which aims to improve business environment, ease public indebtedness through gradual fiscal consolidation, and safeguard financial sector stability.

Although the economy of BH has maintained moderate economic growth in recent years, the unemployment rate remains high at over 20% and GDP per capita at purchasing power parity was only 31% of the EU average in 2016. Significant progress in implementing structural reforms will be needed if the country is to achieve faster economic growth and create more jobs.


Hong Kong – Bosnia and Herzegovina Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Bosnia and Herzegovina decreased by 16.0% from HK$186 million in 2015 to HK$156 million in 2016. The top three export categories to Bosnia and Herzegovina were: (1) telecommunications, audio & video equipment (-1.0%), (2) office machines & computers (-53.9%), and (3) photographic apparatus, equipment and supplies and optical goods, nes; watches and clocks (-2.3%), which represented 92.8% of total exports to Bosnia and Herzegovina.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Bosnia and Herzegovinan buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Bosnia and Herzegovina.

 

 

Please click here to download the charts (PDF format).

 

Last update: 17 November 2017

 



 

Key Information

Capital

Manila

Population

100.7 million

Area

300,000 sq km

Currency

Philippine peso (1 PHP = 0.0197 USD as of 15 November 2017)

Official language

Filipino and English

Form of government

Presidential republic

Ease of doing business by World Bank

# 113 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 56 out of 137 in 2017/18 (1)

Logistics Performance Index by World Bank

# 71 out of 160 in 2016

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

Electronic products (50.6%)

Raw materials & intermediate goods (35.4%)

Machinery & transport equipment (7.7%)

Capital goods (31.2%)

Agricultural products (6.5%)

Consumer goods (16.3%)

Top three export countries (% of total, 2016)

Top three import countries (% of total, 2016)

Japan (20.3%)

China (17.8%)

USA (15.1%)

Japan (11.4%)

Hong Kong (11.5%)

USA (8.6%)

Source: Economist Intelligence Unit

Political Highlights

 

The Philippines is a republic with a presidential system. The president, who is limited to a single six-year term, functions as both head of state and head of government. In the 2016 presidential election, Rodrigo Duterte, the long-time mayor of Davao, won a landslide victory. Since coming into office, he presided over a massive crackdown on crime in the country, which draws criticism from human rights groups. He also pledged to make inclusive growth and poverty reduction his priority, as about one-fifths of Filipinos continue to live in poverty, and development in areas outside Manila has been lagging behind.

The Philippines has a diverse population, speaking more than 80 languages and dialects. It has faced separatist movements for decades in the southern Philippines, a region where Muslims make up a majority of the population in contrast to the rest of the country, which is mainly Roman Catholic. The previous Aquino administration and the Moro Islamic Liberation Front (MILF), the country’s largest Muslim rebel group, signed a comprehensive peace agreement in 2014 after four decades of conflict. The deal grants the Mindanao region greater political autonomy in exchange for an end to armed rebellion. However, there are concerns that delays in ratification of key legislation and an emergence of other rebel groups could lead to renewed conflict.

Duterte's foreign policy is distinctly different from his predecessor in that he is more focused on improving ties with China, despite the long-running territorial dispute over the South China Sea, which is a key global trade route and believed to be rich in oil and gas. Meanwhile, the Philippines is expected to maintain close ties with traditional ally the United States. Under a defence pact, the US has troops at five Philippine military bases. The Enhanced Defence Co-operation Agreement (EDCA), signed in 2014, allows the US to deploy ships, aircraft and troops at those bases and to store equipment for humanitarian and maritime operations.

 

Economic Trend

* Estimates ^ Forecast

Source: Economist Intelligence Unit

 

The Philippine economy posted solid growth in recent years, aided by strong domestic demand thanks to increasing urbanization, a growing middle-income class, a large and young population, and substantial remittance inflows from Filipinos working abroad (equal to 10% of GDP). Private consumption, which accounts for more than 70% of GDP, makes the largest contribution to overall economic growth. Business activities are buoyant especially in the services sector including retail, business process outsourcing (BPO), tourism, real estate and financial services. In the near term, real GDP growth is forecast to remain strong, driven by robust domestic demand.

The country has comfortable fiscal and external positions. Thanks to an improving fiscal position in recent years, public debt as a percentage of GDP declined to 42.1% in 2016, the lowest in over a decade. Earnings from BPO and tourism, together with remittances, continued to generate current account surplus. Gross international reserves were equivalent to almost nine months of import cover. Against a backdrop of sound economic fundamentals, the Philippines has earned investment grade ratings from major credit rating agencies.

While the Philippine economy has performed well, the government realized the need to boost the level of investment, primarily in order to upgrade the country’s inadequate infrastructure. Investment to GDP ratio had risen to 25% in 2016 from below 20% five years ago. To raise more revenue to finance infrastructure and human capital investments, the government is pushing for a comprehensive tax reform, aiming at simplifying the tax system and yielding more tax revenue.

 

Hong Kong –Philippines Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to the Philippines decreased by 1.3% from HK$25,741 million in 2015 to HK$25,400 million in 2016. The top three export categories to the Philippines were: (1) office machines & computers (+9.9%), (2) telecommunications, audio & video equipment (-1.6%), and (3) electrical machinery, apparatus & appliances, & parts (-3.7%), which represented 71.4% of total exports to the Philippines.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Philippine buyers. Currently, the insured buyers in the Philippines range from small and medium sized companies to subsidiaries of foreign listed companies. For 2016, the number and the amount of credit limit applications on the Philippines decreased by 24.1% and 24.6% respectively, while the insured business increased by 15.8%. Major insured products were electronics, chemical products and electrical appliances, which represented 65.9% of ECIC’s insured business on the Philippines. The Corporation’s underwriting experience on Philippines has been satisfactory, with no payment difficulty or claim payment case reported during the past 12 months (November 2016 to October 2017).

 

 

Please click here to download the charts (PDF format).

 

Last update: 16 November 2017


Key Information

Capital

Tbilisi

Population

4.0 million

Area

69,700 sq km

Currency

Georgian Lari (1 GEL = 0.3731 USD as of 14 November 2017)

Official language

Georgian

Form of government

Semi-presidential republic

Ease of doing business by World Bank

# 9 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 67 out of 137 in 2017/18 (8)

Logistics Performance Index by World Bank

# 130 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (47.7%)

Manufactured goods (64.8%)

Agricultural products (28.4%)

Fuels and mining products (20.0%)

Fuels and mining products (20.8%)

Agricultural products (14.7%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

European Union (27.0%)

European Union (30.3%)

Russia (9.8%)

Turkey (18.7%)

Turkey (8.2%)

Russia (9.3%)

* Most recent year for which data are available

Sources: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Georgia is located at the crossroads of Asia and Europe and is crisscrossed by strategically important oil and gas pipelines. Ethnic Georgians form over 80% of total population. Other ethnic groups include Azeris, Armenians and Russians. Since emerging from the collapsing Soviet Union as an independent country in 1991, Georgia has become the arena of conflicting interests. Increasing economic and political influence from the West in the country has long been a source of concern for neighboring Russia. After a short war between the two countries in 2008, a fifth of Georgia’s territory is under the control of pro-Russian separatists.

In the 2016 parliamentary election, pro-Western Georgian Dream-Democratic Georgia (GD-DG), which led the previous ruling coalition, secured a three-quarters majority. Its political dominance helped ensure political stability and policy continuity. Under Prime Minister Giorgi Kvirikashvili, the government is pursuing a policy agenda that focuses on bolstering economic growth. With regards to foreign policy, Georgia will continue to push for closer European integration with an eventual goal of EU membership, as well as North Atlantic Treaty Organization membership, while seeking to improve relations with Russia.

 

Economic Trend

* Estimates

Source: International Monetary Fund (IMF)

Georgia's main economic activities include cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese, copper, and gold; tourism; and producing beverages, machinery, and chemicals. It has sizeable hydropower capacity that now provides most of its energy needs. But due to seasonality, the country needs to import electricity during winter months.

Following an economic slowdown in past few years, Georgia’s economy has begun to recover thanks to stronger economic activity in major trading partners. In 2017, economic growth is forecast to accelerate to 4.0%, supported by exports, tourism and investment.

However, the country continues to face some economic challenges including large current account deficits. While the sharp depreciation of lari, which was down roughly 40% against the US dollar over the past five years, helped the economy adjust to external shocks, it also made the country and local businesses more difficult to service their foreign currency-denominated debts. In April 2017, the International Monetary Fund approved a three-year loan arrangement for Georgia that aimed at correcting the macroeconomic imbalances.

Hong Kong – Georgia Trade


Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Georgia decreased by 0.4% from HK$262 million in 2015 to HK$261 million in 2016. The top three export categories to Georgia were: (1) telecommunications, audio & video equipment (-4.1%), (2) office machines & computers (-12.9%), and (3) electrical machinery, apparatus & appliances, & parts (+2.3%), which represented 74.3% of total exports to Georgia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Georgian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Georgia.

 

 

Please click here to download the charts (PDF format).

 

Last update: 15 November 2017

 

  

 

Key Information

 

Capital

Prague

 

Population

10.6 million

 

Area

78,867 sq km

 

Currency

Czech koruna (1 CZK = 0.0454 USD or 0.0390 EUR as of 31 October 2017)

 

Official language

Czech

 

Form of government

Parliamentary republic

 

Ease of doing business by World Bank

# 27 out of 190 in 2017 (1)

 

The Global Competitiveness Index by the World Economic Forum

# 31 out of 137 in 2017/18 (no change)

 

Logistics Performance Index by World Bank

# 26 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Manufactured goods (88.4%)

Manufactured goods (82.3%)

 

Agricultural products (6.3%)

Fuels and mining products (10.0%)

 

Fuels and mining products (4.6%)

Agricultural products (7.4%)

 

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

 

European Union (83.7%)

European Union (67.3%)

 

USA (2.2%)

China (12.7%)

 

Russia (1.9%)

South Korea (2.5%)

 

* Most recent year for which data are available

Source: World Trade Organization

 

Political Highlights

 

Czechia is a parliamentary republic. It is one of the most stable and prosperous markets in Central Europe. The President is the head of state while the Prime Minister is the head of government. In the parliamentary elections held in October 2017, ANO, an “anti-establishment” party founded by billionaire tycoon Andrej Babis scored a resounding victory, ending a quarter of a century of political dominance by mainstream parties.

ANO collected a share of almost 30% of the vote, nearly three times that of its closest rival, the centre-right Civic Democratic Party. Two other anti-establishment groups, the Pirate party and the far-right SPD, claimed third and fourth place, respectively. Amid a wave of successes for European populists and the refugee crisis in Europe, the ruling centre-left Social Democrats (CSSD) saw its share of the vote tumble to become the sixth-largest party, even though the election took place against the backdrop of a growing economy which boasted the lowest unemployment rate in the EU.

Drawing on his career in the private sector, Babis portrayed himself as a businessman and pledged to run the country more efficiently like a business. He also pledged to boost investment, fight corruption and keep out refugees. Czechia joined the EU in 2004, but the EU’s mandatory refugee quota system increased Euroscepticism and anti-immigration sentiment in the country. While Babis was sharply critical of the EU’s migrant policies, he said that the country should still stay in the EU.

 

Economic Trend

* Estimates  ^ Forecasts

Source: Economist Intelligence Unit

Czechia has a highly-open economy with exports accounting for roughly 80% of GDP. Emerging as an important gateway to the EU market, it has one of the most skilled workforces and the best infrastructures in the region. It plays an important role in the Germany-Central European supply chain. Manufacturing is a major economic activity, especially with regards to the production of automobiles, machine tools, and engineering products. In recent years, the country has been successful at attracting foreign direct investment (FDI). The Czech economy is forecast to grow by 4.5% in 2017, up from the 2.5% growth in 2016, largely driven by domestic demand with private consumption as a key driver.

Due to strong capital inflows and low inflation, the central bank had previously committed to intervene in the foreign exchange market and prevent a rally in the koruna by keeping the currency close to CZK 27 per euro. Keeping the currency relatively weak helped to push up import prices and fuel inflation. In April 2017, the upper limit on the koruna that had been in place for over three years was finally removed as inflation was back on track. Since then, the koruna has appreciated against the euro by over 4%. On euro accession, the country does not have a target date to adopt the euro, and public support for the euro is low. The manifesto of the ANO stated that the country would not adopt the euro if the eurozone does not carry out significant reforms.

GDP per capita at purchasing power parity in Czechia was 88% of the EU average in 2016, which is high by regional standards, and above the levels in Poland (69%), Hungary (67%) and Slovakia (77%). As an export-oriented country, Czechia will benefit from closer economic integration with the EU and continue to serve as a manufacturing base for the EU. On the other hand, the Czech economy remains sensitive to changes in the economic performance of the EU, which is the destination of over 80% of the country’s exports. In the meantime, the country has an ageing population. The labor force is projected to decline gradually due to demographic factors, thus placing pressures on public finances in the longer-term.

 

Hong Kong –Czechia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Czechia decreased by 19.2% from HK$6,927 million in 2015 to HK$5,595 million in 2016. The top three export categories to Czechia were: (1) telecommunications, audio & video equipment (-26.9%), (2) electrical machinery, apparatus & appliances, & parts (-13.1%), and (3) office machines & computers (+14.3%), which represented 80.7% of total exports to Czechia.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Czech buyers. Currently, the insured buyers in Czechia are mainly small and medium sized companies. For 2016, the number and amount of credit limit applications on Czech Republic decreased by 2.6% and increased by 12.8% respectively, while insured business decreased by 15.2%. Major insured products were electronics, electrical appliances and toys, which represented 76.1% of ECIC’s insured business on Czechia. The Corporation’s underwriting experience on Czechia has been satisfactory, with two claim payment cases of small amount reported during the past 12 months (from October 2016 to September 2017), involving jewellery and electronics.

Please click here to download the charts (PDF format)

 

Last update: 31 October 2017

 



Key Information

Capital

Yerevan

Population

3.0 million

Area

29,743 sq km

Currency

Armenian Dram (1 AMD = 0.0021 USD as of 27 October 2017)

Official language

Armenian

Form of government

Parliamentary democracy

Ease of doing business by World Bank

# 38 out of 190 in 2017 (5)

The Global Competitiveness Index by the World Economic Forum

# 79 out of 137 in 2017/18 (3)

Logistics Performance Index by World Bank

# 141 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Fuels and mining products (42.4%)

Manufactured goods (54.2%)

Agricultural products (26.3%)

Fuels and mining products (23.5%)

Manufactured goods (23.5%)

Agricultural products (21.7%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

European Union (26.9%)

Russia (30.8%)

Russia (20.9%)

European Union (22.0%)

Georgia (8.0%)

China (11.0%)

* Most recent year for which data are available

Sources: World Trade Organization

Political Highlights

 

Serge Sarkisian of the Republican Party won a second five-year term as president in 2013. He pushed for constitutional reforms to change the government type from a semi-presidential system to a parliamentary one. A new parliament was elected in April 2017 under the revised constitution, and in spring 2018, the president will be elected by parliament rather than by popular vote.

After independence from the Soviet Union in 1991, Armenia, which has a Christian majority, was involved in a long-standing conflict with largely-Muslim Azerbaijan over the mostly Armenian-speaking region of Nagorno-Karabakh. The territory and surrounding regions are now controlled by Armenian-backed forces. Negotiations between the two countries have so far failed to reach a permanent peace agreement, and clashes between Azerbaijan and Armenia have intensified in recent years. Although spiraling into an all-out war is unlikely, it cannot be ruled out.

Armenia formally joined Russia-led Eurasian Economic Union in 2014, further strengthening its ties with Russia. It has also expressed interest in expanding economic ties with the European Union, and in March 2017, an EU-Armenia Comprehensive and Enhanced Partnership Agreement was initialed. On the other hand, chance of re-establishment of diplomatic ties with Turkey, which supports Azerbaijan, remains slim in the wake of continuous tensions in Nagorno-Karabakh.

Economic Trend

* Estimates

Source: International Monetary Fund (IMF)

 

Armenia has rich deposits of mineral resources such as iron and copper, which contribute to over half of the country’s exports. The economy relies on mining, agriculture, remittances from overseas workers (mainly from Russia), and financial support from Russia and international organizations. Armenia has only two open trade borders (with Iran and Georgia) because its borders with Azerbaijan and Turkey are closed as a result of the ongoing conflict with Azerbaijan. Geographic isolation, dependence on remittances and a narrow export base have made the country vulnerable to decline in commodity prices and dependent on the Russian economic cycle.

Since late 2014, significant declines in remittances and commodity prices have weighed on economic growth, and have adversely impacted the fiscal position. In 2016, real GDP growth slowed to 0.2% only, while the budget deficit widened to 5.6% of GDP. In an attempt to boost growth, the Central Bank of Armenia gradually reduced its policy rate from 8.75% in December 2015 to the current level of 6.0%.

Economic activity in 2017 is showing signs of recovery. For the first half of the year, it grew 6% yr/yr, due to strong growth in exports and a recovery in private demand. With an improving outlook on Armenia’s major trading partner Russia, and a pickup in private sector activities, the growth momentum appears to have sustained into the third quarter, and real GDP growth for the year is projected to rebound to over 3%.

Hong Kong – Armenia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Armenia increased by 33.2% from HK$88 million in 2015 to HK$117 million in 2016. The top three export categories to Armenia were: (1) telecommunications, audio & video equipment (+57.3%), (2) photographic apparatus, equipment and supplies and optical goods, nes; watches and clocks (-9.8%), and (3) non-metallic mineral manufactures, nes (+207.5%), which represented 80.9% of total exports to Armenia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Armenian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from October 2016 to September 2017), there was no insured business on Armenia.

 

 

Please click here to download the charts (PDF format).

 

Last update: 31 October 2017

 

 

Key Information

Capital

Abu Dhabi

Population

9.3 million

Area

83,600 sq km

Currency

UAE dirham (pegged with USD at 1 AED = 0.272 USD)

Official language

Arabic

Form of government

Federation of seven emirates

Ease of doing business by World Bank

# 26 out of 190 in 2017 (8)

The Global Competitiveness Index by the World Economic Forum

# 17 out of 137 in 2017/18 (↓1)

Logistics Performance Index by World Bank

# 13 out of 160 in 2016

Major merchandise exports (% of total, 2015)

Major merchandise imports (% of total, 2015)

Manufactured goods (45.6%)

Manufactured goods (78.7%)

Fuels and mining products (23.8%)

Agricultural products (8.6%)

Agricultural products (3.9%)

Fuels and mining products (5.7%)

Top three export markets (% of total, 2015)

Top three import markets (% of total, 2015)

Iran (3.2%)

European Union (14.3%)

India (3.2%)

China (8.0%)

European Union (3.1%)

USA (6.7%)

Sources: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

The United Arab Emirates (UAE) is a federation of seven emirates. The president and vice-president are elected by the Federal Supreme Council, which is the top policy-making body in the country, for a five-year term with no term limits. With vast energy-related wealth, Abu Dhabi is the most influential emirate and its ruler Sheikh Khalifa bin Zayed al-Nahyan has been president since 2004. By convention, the ruler of Dubai is the prime minister and vice-president. Overall, the political environment of the UAE is broadly stable thanks to the country’s prosperity and generous social welfare benefits.

The UAE has no income tax and no federal-level corporate tax, but the persistently low global oil prices have hurt the country’s oil export revenues and prompted changes in fiscal policy. In a bid to strengthen its public finances, the UAE reduced state spending and removed some fuel subsidies in a politically sensitive reform. Other measures included the introduction of excise taxes on tobacco, alcohol, and soft drinks from 1 October 2017; and value-added tax (VAT) from January 2018.

The UAE is located at a strategic position bordering the Arabian Gulf, the Indian Ocean and the Strait of Hormuz, and less than 100 miles from Iran. The United States is the country’s important ally and main security guarantor. In the face of regional insecurity, the UAE has adopted an increasingly active foreign policy. In June, the UAE joined Saudi Arabia, Egypt and Bahrain in cutting diplomatic ties with Qatar, accusing it of supporting terrorism and destabilizing the region.

Economic Trend

* Estimates

Source: International Monetary Fund (IMF)

 

The UAE is among the world's major oil producers and is a member of the Organization of the Petroleum Exporting Countries (OPEC), but successful efforts at economic diversification have reduced its reliance on the oil sector. Free trade zones, which offer 100% foreign ownership and zero taxes, and a generally liberal trade regime help attract foreign investment. The UAE is now a regional hub for trade, finance, transport and tourism.

Although the UAE’s economy is less dependent on the oil sector than other neighboring Gulf states, it has still been weighed by the persistently low oil prices and OPEC-mandated cuts in oil production. Real GDP growth is expected to decelerate further to 1.3% this year, its slowest pace in nine years. Despite continued fiscal consolidation, lower oil revenues have caused the country to register fiscal deficits since 2015.

Having said that, the UAE has ample financial reserves which help support the country’s economic and fiscal resilience. At the end of 2016, net international investment position was estimated at 167% of GDP according to the IMF, largely because of the massive assets held in sovereign wealth funds, while level of international reserves was comfortable and estimated at 24% of GDP.

The UAE maintains close economic ties with China. Both countries have agreed to establish a joint strategic investment fund worth US$10 billion, financed equally by both countries. Meanwhile, the UAE is one of the most active Middle East countries using the yuan for direct payments to China and Hong Kong. The latest available data showed that the currency accounted for over 80% of these payments by value in August 2016.

 

Hong Kong – UAE Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to UAE increased by 13.2% from HK$46,942 million in 2015 to HK$53,140 million in 2016. The top three export categories to UAE were: (1) non-metallic mineral manufactures, nes (+32.0%), (2) telecommunications, audio & video equipment (+23.1%), and (3) office machines & computers (-16.0%), which represented 78.3% of total exports to UAE.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering UAE buyers. Currently, the insured buyers in UAE are mainly small and medium-sized companies. For 2016, the number and the amount of credit limit applications increased by 14.3% and 2.6% respectively, while the insured business decreased by 9.5%. Major insured products were clothing, electrical appliances and metallic products, which represented 59.6% of ECIC’s insured business on UAE. The Corporation’s underwriting experience on UAE has been acceptable, with one payment difficulty case and three claim cases reported in the past 12 months (from October 2016 to September 2017), involving jewellery, clothing and chemical products.

 

Please click here to download the charts (PDF format).

 

Last update: 24 October 2017


 

Key Information

 

Capital

Sri Jayewardenepura (Administrative) and Colombo (Commercial)

 

Population

20.8 million

 

Area

65,610 sq km

 

Currency

Sri Lankan Rupee (1 LKR = 0.0065 USD as of 20 October 2017)

 

Official language

Sinhala, Tamil

 

Form of government

Republic

 

Ease of doing business by World Bank

# 110 out of 190 in 2017 (↓1)

 

The Global Competitiveness Index by the World Economic Forum

# 85 out of 137 in 2017/18 (↓14)

 

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

 

Textiles & garments (47.4%)

Machinery & transport equipment (26.8%)

 

Tea (12.3%)

Cotton yarn and textiles (13.9%)

 

Petroleum products (2.8%)

Mineral products (12.8%)

 

Top three export countries (% of total, 2016)

Top three import countries (% of total, 2016)

 

USA (27.3%)

India (21.7%)

 

UK (10.1%)

China (12.1%)

 

India (7.3%)

UAE (6.1%)

 

Source: Economist Intelligence Unit

 

Political Highlights

 

Maithripala Sirisena has become Sri Lankan president after a surprise victory over incumbent Mahinda Rajapaksa in the 2015 election. Sirisena has vowed to fight corruption, and bring constitutional reforms to shift political power from the presidency to parliament. He has proposed plans for a new constitution, whose passage requires a two-thirds majority in parliament and endorsement in a national referendum.

Sri Lanka has been scarred by a three-decade civil war arising from ethnic tensions between Sinhalese majority, predominantly Buddhists, and Hindu Tamil minority in the northeast. The war ended in 2009 when government forces seized the last area controlled by Tamil Tiger rebels, but splits are unlikely to be healed quickly. Economic development especially in rural areas and national reconciliation are the government’s priority. The new constitution is expected to address the issue by providing the Tamil with more autonomy.

Sri Lanka is located virtually at the center of the Indian Ocean, straddling some of the world's busiest sea lanes. It is an important component of China's Belt and Road initiative and represents a trans-shipment hub for Chinese goods delivering to Africa and the Middle East. China is investing massively in infrastructure in Sri Lanka. Although the Sirisena administration suspended some projects when he came to power, both countries would have an interest in ensuring that relations remain intact. Meanwhile, Sri Lanka will continue to strengthen relations with India, due to geographical proximity, political influence from India's Tamil community and their economic ties.

 

Economic Trend

* Estimates
^ Forecasts

Source: Economist Intelligence Unit

 

Following the end of the civil war, Sri Lanka registered robust economic growth, largely driven by reconstruction projects and an expanding tourism sector. However, there have been signs of slowdown. For 2017, economic growth is forecast to slow to 4.2%, as the agricultural sector, which employs around 30% of the labour force, was hit by natural disasters such as droughts, floods and landslides. Growth is expected to rebound next year when agricultural production normalizes and infrastructure projects pick up.

While economic performance in Sri Lanka has been impressive over the past decade, macroeconomic health remains a concern with large budget deficit and rising public debt. Last year, the country reached an agreement with the International Monetary Fund for US$1.5 billion in loans to help restore macroeconomic stability. In return, the government needs to carry out fiscal reforms, aiming to narrow the budget deficit to 3.5% of GDP by 2020.

Currently, wealth is concentrated in the western province where Colombo is located, resulting in large regional disparities. The infrastructure development in the north and east since the end of the civil war has helped narrow the income gap. Notably, many tourism developments are progressing in areas outside the western province. Nevertheless, urban residents, particularly those in Colombo will continue to act as the main source of consumption power in Sri Lanka.

 

Hong Kong – Sri Lanka Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Sri Lanka decreased by 0.3% from HK$4,001 million in 2015 to HK$3,991 million in 2016. The top three export categories to Sri Lanka were: (1) textiles (-4.7%), (2) telecommunications, audio & video equipment (+31.9%), and (3) clothing & clothing accessories (+0.9%), which represented 69.9% of total exports to Sri Lanka.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Sri Lankan buyers. Currently, the insured buyers in Sri Lanka are mainly small and medium sized companies. For 2016, the number and the amount of credit limit applications on Sri Lanka decreased by 33.3% and 47.3% respectively, while insured business decreased by 20.1%. Major insured products were textiles, clothing and office & stationery supplies, which represented 93.9% of ECIC’s insured business on Sri Lanka. The Corporation’s underwriting experience on Sri Lanka has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from October 2016 to September 2017).

Please click here to download the charts (PDF format)

 

Last update: 23 October 2017

 

 



Key Information

 

Capital

Riyadh

 

Population

31.8 million

 

Area

2,149,690 sq km

 

Currency

Saudi Riyal (pegged to the US dollar at 1 USD = 3.75 SAR)

 

Official language

Arabic

 

Form of government

Monarchy

 

Ease of doing business by World Bank

# 94 out of 190 in 2017 (↑2)

 

The Global Competitiveness Index by the World Economic Forum

# 30 out of 137 in 2017/18 (↓1)

 

Logistics Performance Index by World Bank

# 52 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Mineral products (75.4%)

Machinery & transport equipment (45.7%)

 

Chemicals (7.6%)

Foodstuffs (14.0%)

 

Plastics (7.5%)

Chemical & metal products (8.4%)

 

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

 

China (13.6%)

China (16.2%)

 

Japan (11.3%)

USA (15.0%)

 

India (10.7%)

Germany (6.3%)

 

* Most recent year for which data are available

Source: Economist Intelligence Unit

Political Highlights


As a leading oil producer in the world, and also the birthplace of Islam, Saudi Arabia is a major power in the Middle East and the Arab world. Islam is the sole official religion, with Sunnis making up 90% of the population. The Al-Saud family has been ruling Saudi Arabia since the kingdom’s foundation in 1932. Modest political reforms, such as granting women more rights, have been introduced, but bold political reform is unlikely due to strong objections from conservatives. King Salman bin Abdul-Aziz al-Saud, aged 81, ascended the throne in 2015. To pave the way for a smooth transfer of power to the next generation, his son and crown prince, Mohammed bin Salman, has been given a major role in policymaking.

The rule of the Al-Saud family remains secure, but the kingdom is facing a number of challenges. Amid the persistently weak oil prices which have depressed the government’s primary source of income, the government has increased domestic prices for fuel and other utilities, which have the risk to provoke a social backlash. The government will need to boost the private sector and step up its drive to diversify the economy away from its dependence on oil.

Meanwhile, the country is facing threats from Islamic extremism, as well as with regards to regional insecurity. In June, Saudi Arabia, along with the UAE, Egypt and Bahrain, cut off diplomatic ties with Qatar, accusing it of supporting terrorism. In the face of regional turmoil, Saudi Arabia has assumed a more proactive role. However, there is fear that the Sunni-Shia tensions will be further unleashed, posing a security threat to the kingdom.

Economic Trend

 * Estimates  ^ Forecasts

  Source: Economist Intelligence Unit

 

Saudi Arabia is an oil-based economy with strong government controls over major economic activities. It is a dominant member of the Organization of the Petroleum Exporting Countries (OPEC). According to the OPEC, Saudi Arabia possesses 22% of the world’s proven petroleum reserves and ranks as the world’s largest exporter of petroleum. The oil and gas sector accounts for roughly 50% of its GDP and 85% of its export earnings. Thanks to vast oil resources, Saudi Arabia is one of the wealthiest countries in the Middle East. However, the dominance of the oil sector has also made Saudi Arabia’s economy vulnerable to oil price volatility. As oil prices have sunk from their recent peak of above US$110 per barrel in mid-2014 to the current level of around US$50 per barrel, Saudi economy is facing a sharp economic adjustment.

As oil revenues account for over 80% of government revenues, Saudi Arabia’s public finances have deteriorated, due to low oil prices and after years of spending its massive oil wealth to support the local economy and provide subsidized energy and other utilities. In 2016, the kingdom incurred a budget deficit at 12.8% of GDP, which was financed by bond sales and drawing down reserves. Against this background, the OPEC, the Saudi Arabia-led cartel which accounts for a third of global oil supply, has agreed to cut production from January 2017 until March 2018, in an effort to prop up prices. However, relatively low oil prices are likely to persist for some time and the extent of any oil price rebound will be limited by the US shale gas production.

That said, Saudi Arabia should be able to tolerate lower oil prices more readily compared to some other oil-producers because of its substantial fiscal buffer. At the end of March 2017, foreign-exchange reserves stood at roughly US$587 billion. Saudi Arabia also acknowledged that it should reduce oil dependency. Last year, the government unveiled a major economic reform plan, Saudi Vision 2030. The plan, which seeks to attract foreign investment and enhance the overall competitiveness of the Saudi Arabian economy, includes the sale of up to 5% of the state-owned oil company, ARAMCO, and economic diversification through development of the private sector.

Hong Kong – Saudi Arabia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Saudi Arabia increased by 15.6% from HK$7,243 million in 2015 to HK$8,371million in 2016. The top three export categories to Saudi Arabia were: (1) telecommunications, audio & video equipment (+31.6%), (2) office machines & computers (+58.8%), and (3) power generating machinery and equipment (+61.7%), which represented 75.0% of total exports to Saudi Arabia.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience


The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Saudi Arabian buyers. Currently, the insured buyers in Saudi Arabia are mainly small and medium-sized companies. For 2016, the number and the amount of credit limit applications on Saudi Arabia decreased by 20.0% and 54.1% respectively, while the insured business decreased by 28.9%. Major insured products were electrical appliances, toys and metallic products, which represented 69.0% of ECIC’s insured business on Saudi Arabia. The Corporation’s underwriting experience on Saudi Arabia has been satisfactory, with no payment difficulty or claim payment case reported in the past 12 months (October 2016 to September 2017).

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Last update: 11 October 2017

 

 



Key Information

Capital

Tashkent

Population

31.5 million

Area

447,400 sq km

Currency

Uzbekistan Som (1 USD = 8,077 UZS as of 27 September 2017)

Official language(s)

Uzbek

Form of government

Presidential republic

Ease of doing business by World Bank

# 87 out of 190 in 2017 (5)

Logistics Performance Index by World Bank

# 118 out of 160 in 2016

Source: Economist Intelligence Unit

Political Highlights

 

Uzbekistan emerged as an independent country in 1991 following the breakup of the Soviet Union. Predominantly Sunni Muslim, it is the most populous Central Asian country. The first president, Islom Karimov, led the country for 25 years until his death in September 2016. Under his strongman rule, Uzbekistan continued Soviet-style governing and crushed all opposition. His successor, former Prime Minister Shavkat Mirziyoyev, assumed office in December after winning a landslide victory in the presidential election. He has committed to policy continuity but has shown some willingness to reform.

On the diplomatic front, Mirziyoyev has sought to improve relations with Uzbekistan’s Central Asian neighbors, which were strained under the previous administration due to disputes over border demarcation and water resources. Mirziyoyev has also expressed greater interest in bilateral security cooperation with Russia than his predecessor. In the meantime, Uzbekistan, once at the heart of the ancient Silk Road trade route, has established closer ties with China. Last year, they agreed to upgrade their bilateral relationship to a "comprehensive strategic partnership".

Economic Trend


* Estimates

Source: International Monetary Fund

 

Since its independence, Uzbekistan has largely maintained its Soviet-style command economy with subsidies and tight controls on production and prices, among other things. The economy is based primarily on agriculture, natural resource extraction, and remittances from workers abroad (mainly in Russia). Over the past decade, the economy has grown rapidly thanks to increased exports of gas, gold and copper.

 

The impact of low commodity prices and the economic slowdown in neighboring Russia and China were offset by countercyclical fiscal and monetary policies. Last year, real GDP growth remained fast at 7.8%. According to the World Bank, the main driver was investment, which grew at 9.5%. Private consumption recovered in 2016 following a considerable slowdown in 2015, due to increases in public sector wages, pensions and social allowances.

 

As commodity prices are unlikely to return to the high levels of the past decade anytime soon, Uzbekistan will need to find new drivers of economic growth in the future. The government is taking steps to liberalize the economy, including a key reform in September 2017 that liberalized access to foreign exchange and made the Uzbekistani Som fully convertible. As a consequence, the currency was devalued by 92% against the US dollar. While the devaluation will reduce private consumption and push up inflation in the short term, the reform is expected to improve the business environment and spur foreign investment over time.

 

Hong Kong – Uzbekistan Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Uzbekistan decreased by 14.5% from HK$169 million in 2015 to HK$144 million in 2016. The top three export categories to Uzbekistan were: (1) telecommunications, audio & video equipment (-50.2%), (2) professional, scientific & controlling instruments/apparatus (+1,703.9%), and (3) electrical machinery, apparatus & appliances, & parts (+64.9%), which represented 83.3% of total exports to Uzbekistan.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Uzbekistani buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis.  In the past 12 months (from September 2016 to August 2017), there was no insured business on Uzbekistan.

 

 

Please click here to download the charts (PDF format).

 

Last update: 28 September 2017


 

 

Key Information

Capital

Dushanbe

Population

8.5 million

Area

144,100 sq km

Currency

Tajikistani Somoni (1 TJS = 0.1136 USD as of 25 September 2017)

Official language

Tajik

Form of government

Presidential republic

Ease of doing business by World Bank

# 128 out of 190 in 2017 (2)

The Global Competitiveness Index by the World Economic Forum

# 77 out of 138 in 2016/17 (3)

Logistics Performance Index by World Bank

# 153 out of 160 in 2016

Source: Economist Intelligence Unit

 

Political Highlights

 

Tajikistan became independent in 1991 following the breakup of the Soviet Union. After a five-year civil war at the onset of independence, some stability has returned to Tajikistan. President Emomali Rahmon has been in power since 1994, and was re-elected for a fourth term in 2013. Having a firm grip on power, he further strengthened his position by designating himself “Leader of the Nation” with limitless terms and lifelong immunity through constitutional amendments.

Externally, relations with neighboring Uzbekistan and Kyrgyzstan are strained due to disputes over border demarcations and control of water resources. On the other hand, Tajikistan maintains close ties with Russia, which provides military aids and has troops basing rights in Tajikistan until 2042. Tajikistan is also expanding its ties with China, which has extended credits to the country and has helped to build roads, tunnels and power infrastructure.

Economic Trend



* Estimates

# Data is sourced from Economist Intelligence Unit

Source: International Monetary Fund

Tajikistan is a mountainous country with less than 7% of the land area arable. Its GDP per capita is one of the lowest among the 15 former Soviet Republics. Because of a lack of employment opportunities, more than one million Tajik citizens work abroad (roughly 90% in Russia). Remittances from these workers, together with revenues from aluminum and cotton exports, are the main contributors to Tajikistan’s economy. 

Over the past few years, Tajikistan’s economy has been weighed down by low commodity prices and the economic slowdown in Russia. According to the Central Bank of Russia, remittances from Russia to Tajikistan in US dollar terms fell by 43% in 2015 year-on-year and 1.4% in 2016. As a result, Tajikistan’s currency, the somoni, has come under pressure and lost almost half of its value against the US dollar since 2014, leading to higher import costs and inflation. The National Bank of Tajikistan had intervened to support the currency with measures including controls to restrict households' and companies' access to foreign exchange.

Since the end of the civil war, Tajikistan has pursued economic reforms in order to improve competitiveness. However, private-sector development has been slow despite some progress in privatizing public enterprises. Difficult environment for doing business, and inadequate infrastructure, in particular an insufficient and unreliable energy supply, remain major hurdles to attracting foreign investment. To address this, Tajikistan has begun building the Rogun hydroelectric power plant, a US$ 3.9 billion project which is expected to start providing electric power in late 2018.

Hong Kong – Tajikistan Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Tajikistan decreased by 77.1% from HK$30 million in 2015 to HK$7 million in 2016. The top three export categories to Tajikistan were: (1) telecommunications, audio & video equipment (-81.0%), (2) electrical machinery, apparatus & appliances, & parts (-66.1%), and (3) general industrial machinery and equipment, nes, and machine parts, nes (+38.2%), which represented 83.4% of total exports to Tajikistan.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Tajikistani buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis.  In the past 12 months (from September 2016 to August 2017), there was no insured business on Tajikistan.

 

 

Please click here to download the charts (PDF format).

 

Last update: 26 September 2017



Key Information

Capital

Ashgabat

Population

5.4