Our Q4 ‘Export Finance Issue’ is published against a backdrop of grim forecasts for the growth of trade.

In the weeks before our press date in October, both the International Monetary Fund (IMF) and World Trade Organization (WTO) downgraded predictions for the performance of the global economy.

With inflation at its highest rate in several decades and economic activity experiencing a sharp downturn across much of the world, the IMF now anticipates global growth to slow from 6% last year to 3.2% in 2022, and to 2.7% in 2023. The WTO estimates GDP growth of 2.8% this year and has dropped its 2023 forecast by a percentage point to 2.3%.

The WTO also expects global merchandise trade to “slow sharply” in 2023, with economists predicting a mere 1% increase in global volumes, down significantly from the previous estimate of 3.4%. As a result, demand for financial support is expected to spike, just as it did during the pandemic.

In response, the export finance market must continue to evolve and adapt as lenders and export credit agencies (ECAs) around the world try to keep trade flowing where it is needed most.

ECAs have already been proactively developing new products and delivering what the market needs in terms of government support, as outlined by speakers in this issue’s export finance roundtable discussion. ECAs’ responses to the world’s multiple crises are “much more robust” than in the past, one participant says.

Elsewhere in this issue, our ECA report takes a look at the specific ways in which agencies, most notably those of the US and UK, are shifting their offerings and increasing their exposure to domestic transactions as they work to bolster local manufacturing capabilities and tackle the climate crisis.

This trend is increasingly visible in other markets too. In the days before this publication goes to press, Sweden’s ECA launched a new guarantee – its first ever product aimed at imports rather than exports – to shore up access to raw materials for domestic companies producing goods linked to the clean energy transition.

Our coverage also includes an interview with representatives of the Berne Union’s Climate Working Group, examining the ways in which it is accelerating climate action in the export credit sector. This involves highlighting best practice as industry stakeholders face growing pressure to align themselves to environmental objectives.

In March this year, ECAs were given until the end of 2023 to set deadlines for ending support for the fossil fuel sector, while last year the OECD Arrangement agreed to formally ban export credit support for unabated coal.

Our roundtable discussion also sees participants moot the introduction of further changes to the Arrangement to coincide with the Cop27 summit in November. These may include greater restrictions on financing oil and gas, as well as initiatives aimed at better supporting green transactions.

While experts concede that the threat of recession may affect risk appetites among banks and ECAs, they remain optimistic over the state of the export finance market for the next 12 months. Crucially, a highly challenging economic situation showcases “the core value” of export credit support. As one speaker says, “there has never been better dialogue between ECAs and banks on key issues affecting the market”.