Traling’s research on the global trade finance gap indicates that companies will continue to face collection issues in 2023. The study, which analyzes the collection status and payment behavior of companies, suggests that the $30 trillion liquidity gap resulting from payment delays will persist for some time.
Traling, a leading brand in the Forex market, has published its research on the global trade finance gap. According to the study, companies will continue to chase their receivables in 2023, just as they did in 2022. The research highlights that there has been the largest annual increase in Working Capital Requirements (WCR) worldwide since 2008, due to payment delays, indicating that the $30 trillion liquidity gap will remain open for a while.
Global companies’ WCR at a 15-year high
According to Traling’s research, globally, businesses’ Working Capital Requirements reached 72 days of turnover in 2022, increasing by 9 days compared to the previous year’s 3-day increase. This represents the largest surge in 15 years. The increase in Working Capital Requirements can be attributed to low growth rates, high inflation, rising financing costs, and collection delays. In other words, a significant portion of financial resources is allocated to sustaining business operations, leaving little room for investment, product development, geographical expansion, acquisitions, modernization, and debt reduction. Traling economists predict that the global Working Capital Requirements will generally remain stable this year. The research also indicates that receivable and payment terms will slightly increase, while inventory terms are expected to decrease at the same rates. Slowing commercial activities, excess production, and tightening financial conditions may lead to a reduction in inventory and an increase in payment delays.