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Fitch cuts 2022 growth forecast for global economy, with biggest revision to China

EconomyFitch cuts 2022 growth forecast for global economy, with biggest revision to China

New York (The Times Groupe)- The credit rating agency Fitch Ratings on Monday cut its world GDP growth forecast to 2.9% for 2022. global economy

In its latest report, the global ratings agency said the Russia-Ukraine war is intensifying global inflation pressures, with increasingly adverse implications for the global growth outlook.

Global manufacturing supply chain pressures were exacerbated by the latest quarantine measures in China due to COVID19.

“China is now expected to grow at 3.7% this year, down from 4.8% in March,” the report stated.

“With the lockdown in Shanghai still in place, we do not expect the economy to bounce back quickly in 2022,” it said.

Additionally, Fitch lowered its growth forecast for the US by 0.6 percentage points to 2.9% and the eurozone by 0.4 percentage points to 2.6%.

“We have cut world growth in 2023 by 0.1 percentage points to 2.7%,” the report said.

Also, consumers in the eurozone will see a higher drag on their real incomes from inflation, and German industry is seeing supply chain disruptions and the slowdown in China.

According to the report, consumer spending is supported by strong job and wage growth in the near-term. Due to aggressive monetary tightening, growth will slow from mid-2023 to barely positive rates in quarterly terms.”

Because inflationary pressures have become so pronounced that central banks are being forced to act, the Federal Reserve’s policy stance will become more restrictive.

In the first quarter of this year, the Turkish economy performed much better than expected.

Despite the decline in imports, the increase in investments and net trade helped boost growth, it said.

Turkish economic growth is expected to reach 4.5% this year, 3% in 2023, and 2.9% in 2024.

Fitch had previously predicted that the Turkish economy would grow by 2.4% this year and 3.2% in 2023. global economy 2022 growth forecast GDP

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