Fitch Ratings Lowers 2023 World GDP Forecasts
December 05 2022 - 3:03PM
Dow Jones News
By Stephen Nakrosis
Fitch Ratings Inc. on Monday said it again revised down world
GDP forecasts for 2023 "as central banks intensify their fight
against inflation and the outlook for China's property market
deteriorates."
Fitch said it now expects 2023 world GDP growth of 1.4%, down
from the 1.7% expectation in the September Global Economic
Outlook.
U.S. growth is now forecast at 0.2% for 2023, down from an
earlier prediction of 0.5% "as the pace of monetary policy
tightening increases," Fitch said. The agency said its latest
forecast of a peak Fed rate, at 5%, is up 100 basis points from
September.
China's growth forecast has been cut to 4.1% for 2023, down from
4.5%, "as prospects for a recovery in housebuilding fade," Fitch
said. According to Fitch, the economic slowdown in China "has eased
pressure on global commodity prices, but the country is a huge net
supplier of goods and pandemic-related disruptions to exports could
hit global manufacturing supply chains."
Eurozone 2023 growth expectations are now 0.2%, up from an
earlier -0.1%, as the European gas crisis has eased, Fitch said.
However, sharper European Central Bank rate rises will weigh on
demand.
"The risk of European natural-gas shortages and rationing this
winter has receded as LNG imports have surged and gas consumption
has fallen. But the crisis is far from over and high wholesale gas
prices continue to weigh heavily on firms' costs and household
budgets," Fitch said.
According to Fitch, recessions are anticipated in the eurozone
and U.K. starting later this year, and in the U.S. in the second
and third quarters of next year. Unemployment is seen rising above
5% in the U.S. and U.K. in 2023, Fitch said.
Write to Stephen Nakrosis at stephen.nakrosis@wsj.com
(END) Dow Jones Newswires
December 05, 2022 14:48 ET (19:48 GMT)
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