Moody's slashes G-20 nations' GDP growth to 2.5% from 3.1% in 2022

Global credit rating agency Moody's Investors Service reduced the 2022 real gross domestic product (GDP) growth forecast for G-20 countries to 2.5 per cent from 3.1 per cent made in May

Moody's
Moody's
IANS Chennai
2 min read Last Updated : Aug 31 2022 | 10:21 PM IST

Global credit rating agency Moody's Investors Service on Wednesday reduced the 2022 real gross domestic product (GDP) growth forecast for G-20 countries to 2.5 per cent from 3.1 per cent made in May.

Moody's also cut the GDP growth forecast for the G-20 nations to 2.1 per cent from 2.9 per cent for the year 2023.

"Global monetary and financial conditions will remain fairly restrictive through 2023," said Madhavi Bokil, Senior Vice President at Moody's.

"Central banks will require decisive proof that high inflation no longer poses a threat to their policy objectives before letting up on their tight monetary stance. The challenging global economic environment of today will be resolved with a sharp and disinflationary slowdown in economic growth," Bokil added.

For G-20 advanced economies, Moody's forecasts 2.1 per cent growth in 2022, and 1.1 per cent in 2023.

For G-20 emerging market countries, Moody's projects 3.3 per cent growth in 2022 and 3.8 per cent in 2023.

According to Moody's, global trade in durable goods and commodity prices are set to soften.

A pullback in goods demand is underway. Supply-chain problems are easing and global auto production is picking up, it said.

Producer price inflation, which is a broad measure of supply-side inflation, appears to have peaked in several countries.

Importantly, inflation expectations remain anchored over the medium term. Labour markets remain tight in advanced economies, said Moody's.

The invasion of Ukraine remains central to the larger macroeconomic picture.

While Moody's believes it is unlikely the conflict will broaden beyond Ukraine's borders, such an event would mark a significant escalation.

Further, the risk of further energy shocks remains high. As for monetary policy, it will be tricky for central banks to navigate to an equilibrium where inflation falls but economic activity does not slip into a deep recession.

China's low tolerance for Covid-19 outbreaks and weakness in its property sector pose risks to its growth outlook.

--IANS

vj/vd

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :Moody's RatingGDP forecastG-20

First Published: Aug 31 2022 | 10:21 PM IST

Next Story