The global economy is becoming more like Japan’s, with low growth despite ultra-expansionist monetary policies.

Surplus cash is intensifying financial market volatility.

Risk has increased as a result of the Chinese slowdown, low oil prices, and mounting political uncertainty.

Based on these developments, Coface has downgraded its risk scores of Armenia, Japan, Kazakhstan, Kuwait, Malaysia, Oman, and Saudi Arabia.

Although emerging economies recorded a slight recovery earlier this year, at 3.9 percent growth forecasted in 2016 compared to 3.4 percent in 2015, the slowdown in advanced countries, with expected growth of 1.7 percent in 2016, is disturbing the balance of the global economy more than ever before, according to a recently released global report from credit insurer Coface. Global growth is unlikely to exceed 2.7 percent this year, said the Coface report.

In the United States, there are vulnerable points despite a generally healthy economy. The services sector is doing well, supported by high levels of employment and household consumption, but manufacturing is suffering from the strong dollar.

The United Kingdom is facing uncertainty over its future within the European Union, which is increasing financial market volatility and sinking confidence indexes. The euro area is driven by internal demand, an improved employment market, and favorable credit terms. However, in Greece, Portugal, Spain and Ireland, corporate confidence is low, hampering growth.

“In all, the world economy is beginning to display the economic characteristics of Japan,” said the report, “with low growth despite ultra-expansionist monetary policies, volatile financial markets and zero inflationary pressure.”

The Japanese economy is also hindered by low consumption levels. The devaluation of the yen earlier this year and the ineffectiveness of the Abenomics initiatives have led the Bank of Japan to adopt negative interest rates. After placing the country under negative watch in January 2016, Coface has downgraded Japan’s assessment to A2.

While the Central Bank of China has reduced its mandatory reserves, supporting Coface’s growth forecast of 6.5 percent in 2016, the risk of a more significant slowdown remains. In parallel, the fall in oil prices has brought budgetary difficulties to exporting countries: their deficits are increasing more rapidly and operations in the hydrocarbon segment are challenged by negative external effects. These factors have led to several downgrades and negative watches.

Malaysia, with a new A3 risk assessment, is suffering from low prices for raw materials and the scandal over its sovereign wealth fund. Investor confidence has been affected, against a backdrop of high household debt and low external demand. The country’s growing political risks add to the problem.

The Sultanate of Oman (new A4 assessment) remains one of the most vulnerable economies in the region when faced with low oil prices. Its short-term production capacity remains limited, while oil income, almost 85 percent of public income, dropped 36.3 percent in 2015.

In Kazakhstan, now with a C assessment from Coface, exports to China have slowed, while the country has also been affected by Russia’s recession and low oil prices.

Saudi Arabia, with an A4 rating and under negative watch, has seen its public deficit expand. Prices remain low and company confidence indexes are starting to deteriorate.

Kuwait (A2 and under negative watch) has been less affected. It may see its public and external accounts downgraded in 2016, according to Coface.

The rise in political instability could have a serious impact on economies already affected by the global slowdown.

Armenia has joined the D category, which includes countries where companies are facing a very high probability of default. The country is impacted by the Russian recession. The number of Armenian workers in Russia dropped by five percent in 2015. It is also facing growing frustration from the population over corruption and weak economic performance, which is contributing to the deterioration of its social and political situation.