Moscow. December 7. The weakening of emerging markets suppress growth of the world economy, but is unlikely to cause a global recession, said in the quarterly International economic forecast (Global Economic Outlook, GEO), prepared by the Agency Fitch.
The Agency projects that world GDP will increase by 2.6% in 2016 and 2.7% in 2017. Thus, global economic growth will accelerate compared to the projected 2015 level of 2.3%, the lowest since the global crisis, noted in Fitch.
“Despite the fact that appeared this summer, concerns about global growth and not disappeared, the problems emerging markets do not cause undue damage to activity in the major developed economies,” – said in GEO.
The Chinese economy rather deal with the difficulties than will make a “hard landing”, experts of the Agency.
Fitch forecasts is largely unchanged compared with the September GEO, however, Brazil was no exception. Thus, the lowering forecast of Brazil’s GDP for 2015 is deteriorated to 3.7% compared with September of 3%, for 2016 2.5% from 1%. The lower forecasts reflect a sharp reduction in investment and consumption in Brazil, as well as the deteriorating situation in the labour market, according to GEO.
Fitch experts note the high growth of private consumption in the largest economies of the world. So, in the U.S. and Europe the growth is the highest since pre-crisis times, and indicators of consumer spending were quite strong in China and Japan.
Low oil prices have provoked a sharp reduction in investment in the oil sector, however, contributed to the increase in the proportion of discretionary income, according to experts of the Agency.
In addition, they point to improving labor markets, and the growth of consumer lending.
“The Federal reserve (fed) is likely to tread carefully after the first rise rate, which is expected to occur in December. We expect that the fed will increase the rate four times until the end of 2016”, – stated in GEO.
Meanwhile, the European Central Bank (ECB) and the people’s Bank of China (PBC, the Central Bank of the country) increasing the stimulus and the Bank of Japan may soon follow, experts say.
“Fears of a very sharp weakening of the GDP growth of China after years of growth volatility in the financial markets are not confirmed by economic indicators. In addition to the strong consumer sector and the service sector remain high investments in infrastructure. This constrains the overall reduction in investment caused by the weakening of the real estate sector and manufacturing sector,” says GEO.
However, experts Fitch would expect growth to ease as the Chinese economy in the 4th quarter of 2015 and in 2016.
According to a September Fitch ratings, Russia’s GDP in 2015 will decrease by 4% and will increase by 0.5% in 2016.