Key takeaways:
- The 2023 Trade Register report by ICC, GCD, and BCG confirms that credit risk in trade, supply chain, and export finance remains stable amid global economic uncertainty.
- Despite disruptions in global trade due to factors like the Russia-Ukraine conflict and increased inflation, trade and supply chain finance products remain important and low-risk.
- The ICC Trade Register is a reliable source of default rate data, covering nearly a quarter of all global trade finance transactions, and it indicates that increased default rates are primarily linked to specific regions and known events.
- ICC Secretary General John W.H. Denton AO emphasizes that, despite rising default rates in a less stable world, trade, supply chain, and export finance assets demonstrate long-term resilience, attracting continued support from banks and investors.
A new report from the International Chamber of Commerce (ICC) along with Global Credit Data (GCD) and Boston Consulting Group (BCG) reveals that credit risk in global trade finance remains stable, despite ongoing economic uncertainty worldwide.
Before the COVID-19 pandemic, global trade was growing faster than the economy. Even during the pandemic, trade stayed strong, bouncing back in 2021 as the world reopened. But since 2022, things have changed due to issues like the Russia-Ukraine conflict, rising inflation, and high interest rates. Experts predict that global trade will drop by 2% from 2022 to 2023 before slowly recovering.
However, the importance of trade finance hasn’t waned. In today’s more challenging economic and geopolitical environment, having access to money and managing risk is crucial. The ICC Trade Register’s latest data shows that trade finance remains a low-risk option in 2022, even when compared to other investments.
The ICC Trade Register is a trusted source of default rate information, covering nearly a quarter of all global trade finance transactions. The report indicates that default rates increased compared to 2021, but this is in line with long-term trends and is mainly linked to specific regions and known events.
ICC Secretary General John W.H. Denton AO shared his insight, saying, “Even though the world has become less stable, trade finance assets remain strong in the long run. This should encourage banks and investors to continue supporting this valuable asset class.”
In summary, the latest report shows that credit risk in global trade finance is holding steady, despite the unpredictable global economic situation. Trade finance remains a reliable and low-risk choice for banks, companies, and investors.
The ICC Trade Register’s data is a trusted source, revealing that increased default rates are mostly tied to specific regions and known events. This information should reassure banks and investors that trade finance remains a resilient and valuable asset class. ◼
Business Bayani PH 
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