The high degree of uncertainty in the global economy is affecting the financial health of companies, according to a recent report from the global credit insurer Coface. Two main factors continue to impact the situation: global trade activity and oil prices.

Weak global trade activity means that a strong growth recovery is unlikely. Among developed economies, stable growth is forecast for the near-term at 1.6 percent in 2016 and 1.5 percent in 2017. The current situation in the U.S. is not encouraging companies to create additional employment opportunities. In Japan, despite fiscal policies aimed at correcting for weak private investment, the forecast remain cautious.

An improvement is expected, however, among emerging economies, with an increase in GDP growth from 3.7 percent in 2016, to 4.2 percent in 2017. Financial indicators are showing a reversal in Brazil and Russia, which are expected to exit their recessions in 2017.

Oil prices remain a key issue for emerging economies. Despite the OPEC agreement on output quotas, the Brent index is only expected to record moderate gains, with Coface forecasting $44 in 2016 and $51 in 2017.

“The return to equilibrium between supply and demand will take some time,” concluded the Coface report.

This observation has led to a series of further downgrades of several commodity-dependent countries:

Oman (B) is facing a drastic decline in public spending, which is impacting investment; Trinidad and Tobago (B) is confronted by a heavy fall in natural gas and crude oil output; Nigeria (D) is in recession and has seen its foreign currency reserves depleted, adversely affecting industrial production; and Mongolia (D) is affected by the slowdown in the Chinese economy, which absorbs over 90 percent of its exports, as well as by weak commodity prices.

UK Downgraded Amid Uncertainty Surrounding Brexit

Europe is threatened by political and banking risks. Although political risks prevail in Greece, Spain and Italy, Brexit remains Europe’s key issue and has prompted Coface to downgrade the UK to A3. Even though UK growth could reach 1.9 percent this year, growth in 2017 is only expected to be 0.9 percent, despite the Bank of England’s base rate cut in August and the anticipated scenario of a favorable deal with the European Union.

Risks also need to be monitored in the property sector, which is seeing heavy household mortgage debt (132 percent of available income) and a 34.6 percent overvaluation of prices. In this highly uncertain environment—and with the terms for leaving the European Union yet to be established—the pound remains volatile and has depreciated heavily. The sharp fall in the currency, which hit a 31-year low against the dollar in early October, could benefit exporters and also curb consumer spending due to inflation.