Tuesday, October 3, 2023

Fitch warns of potential US recession and updates global growth prospects

Fitch Ratings released an updated report on global economic perspective and in his analysis he emphasized the possibility of the US entering a “soft economy” during the second half of 2024. This forecast is based on two reasons important: the deep crisis in China’s real estate market and the tightest monetary policies in that country and Europe.

In an unexpected turn, Fitch Ratings It also revised its expectations for global economic growth for the year 2023. The agency revised its forecast by a tenth, putting it at 2.5%. This increase shows the remarkable resistance to the economy it shows USA, Japan and emerging markets nothing to do with China.

In detail, Fitch increased the US growth projection by eight tenths, reaching solid 2%and that of Japan at seven-tenths, up to 2%. In addition, the development of emerging markets, excluding China, increased by five tenths, which puts it in a promising position. 3.4%. These improvements offset downward adjustments to growth estimates for China and the euro zone.

The document revealed that the company’s revenue expectations for 2024 will also worsen. However, it seems that the US remains steadfast in these expectations, surpassed Europe and China.

Fitch: what it says about global growth

On the other hand, Fitch reduced its projections global growth in 2024. A general slowdown in the world economy is expected, with lower revisions in all areas. The US growth forecast was cut by two tenths, reaching 0.3%. the the euro zone also experienced a decrease of three tenths, with a growth projection of 1,1%. China and emerging markets, excluding the Asian giant, saw a decline in two tenths in their growth expectations, remained at 4.6% and 3%, respectively.

China’s slumping real estate market and tighter monetary policies in the US and Europe are presented as the main obstacles to global growth in 2024. Fitch emphasized that the strengthening of the real estate market in China has not yet happened, which has affected export demand.

As for the US, although it has experienced strong growth in consumption a slowdown in labor demand and a weakening of business investment prospects are expected due to tighter credit conditions.

In the case of the euro zone, economic recovery has been stalled by the energy crisis and faces new challenges stemming from the slowdown in global trade and China. In addition, the tightening of the monetary policy of the European Central Bank affecting credit growth in the region.

Despite the downward changes for 2024, Fitch Ratings emphasizes that it is expected faster than expected growth in 2023, indicating some economic stability in the coming years. However, it is important to remain vigilant about the current challenges that may influence the global economic landscape.

Nation World News Desk
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