Fitch Ratings has made further cuts to world GDP forecasts in its latest Global Economic Outlook (GEO), but said the slump in global economic activity is close to reaching its trough.
"World GDP is now forecast to fall by 4.6% in 2020 compared to a decline of 3.9% predicted in our late-April GEO. This reflects downward revisions to the eurozone and the U.K. and, most significantly, to emerging markets (EM) excluding China," said Brian Coulton, Chief Economist, Fitch Ratings.
The rating agency said output in emerging markets, excluding China will fall by 4.5% this year compared to a predicted fall of 1.9% earlier. Fitch said the large revision in estimates reflects the deterioration in the health crisis in many of the largest EMs over the past month or so, including in Brazil, India and Russia.
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“The biggest forecast cut was to India where we now anticipate a 5% decline in the current financial year (ending March 2021) in contrast to an earlier forecast of growth of 0.8%. India has had a very stringent lockdown policy that has lasted a lot longer than initially expected and incoming economic activity data have been spectacularly weak,” Fitch said.