Global growth prospects for 2023 have improved significantly since December, says Fitch Ratings in its latest Global Economic Outlook (GEO) report, but the impacts of rate hikes on the real economy still lie ahead and are likely to push the US economy into recession later this year, APA-Economics reports citing the Agency.
The improvement in the near-term outlook reflects China’s post-Covid-19 reopening, a material easing of the European natural gas crisis, and surprising near-term resilience in US consumer demand. This is the first upgrade to Fitch’s year-ahead world growth forecasts since the start of the Russia-Ukraine war.
Fitch now forecasts world growth in 2023 at 2.0%, revised up from 1.4% in the December 2022 GEO. We have raised China’s 2023 growth forecast to 5.2% from 4.1% in December, eurozone growth to 0.8% from 0.2% and US growth to 1.0% from 0.2%.
But we have lowered global growth in 2024 to 2.4% from 2.7% to reflect the lagged impact of rapid Fed and ECB interest rate hikes.