Asian markets will grow at a rate close to 5 percent annually. Similarly, African markets expect growth dynamics of 4.3 percent next year. In the era of a recorded economic slowdown in Europe and the uncertainty associated with Brexit or economic protectionism, these may be the directions that should be of interest to European companies.
If we look at how the economy develops in different parts of the world, we can notice that it is slightly out of sync,” says Tomasz Starus, board member Euler Hermes for Newseria Biznes information agency. „We see that the United States is growing, Africa is growing rapidly, but Europe is slowing down, and Asia too. Nevertheless, Asia is a huge market and very well stabilized by the wise, long-term policy of the Chinese authorities. China is changing its economy from export-oriented to more sustainable, with greater impact of internal consumption, and this makes it a great market for all exporters.”
Dynamic development of Africa
Similarly, Africa is an attractive market. This year the African economy will expand by 3.9 percent. Next year it is expected to grow by 4.3 percent. Africa has six of the world’s ten fastest growing economies this year, according to the World Bank.
Africa is a poor continent but it is also in need of a lot of goods. It is developing very well and so will be in the near future, mainly due to the increase in oil prices, which is the basic export material for many countries, especially in North Africa,” says Tomasz Starus.
How to protect against protectionism?
New markets may turn out to be a chance for European entrepreneurs, especially today when trade within Europe gets harder and harder. Experts note that the first, disturbing signals are already noticeable in this region. Economic growth slows down and political instability within the EU related, for example, to the situation in Italy or Brexit, causes a lot of uncertainty.
It’s not everything. The way the global economy is developing today is also changing. For instance, economic protectionism is getting stronger in Europe, but also in the USA and China. It is a big burden for many companies, forcing them to pay tariffs, which in turn leads to the fact that their products cease to have a competitive price. However, you can minimize the negative impact of protectionism and even use it for your own good. Experts argue that entrepreneurs who will consider wary partners wisely can use the trade war, e.g. by replacing American companies with the Chinese market.
Acquiring new markets is something that should help entrepreneurs not only increase the scale of operations and profits but above all diversify the risk,” says the head of risk assessment in Euler Hermes. „China is an attractive, large market, but it is not easy. You need to learn about the culture, find local partners and enter this market. Nevertheless, if a company is present in many markets, then the chance that a crisis in one country or region will shake it up, is smaller because it always has a second, third or fourth ‚leg’ on which it can resist,” he assures.
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