G20 economies to grow at a little more than 3%: Moody's

02 Sep '17

3 min read

The G20 economies will collectively grow at an annual rate of a little more that 3 per cent in 2017 and 2018, higher than the 2.6 per cent recorded in 2016, according to a recent report by global rating agency Moody’s. For Asia Pacific, strong data for the first half of 2017 have prompted upward revisions to the year’s growth forecasts for China, Japan and Korea.

Moody's expects that the synchronized global economic expansion currently under way will continue for the rest of 2017 and 2018, the company said in ‘Global Macroeconomic Outlook (August 2017 Update): Above-potential growth in advanced economies propels economic expansion’.

With considerable slack remaining in some euro area economies and some emerging market countries, the current pace of growth of around 2 per cent in the advanced economies and more than 5 per cent in emerging markets is not only sustainable in the near term, but also has potential for upside, it said.

Any escalation of conflict in the Korean Peninsula, the South China Sea, and the Middle East, financial market volatility arising out of sudden changes in market expectations regarding monetary policy tightening in developed nations, a probable protectionist turn of US trade policy and unanticipated spillovers from the implementation of deleveraging measures in China are major area of concerns that have the potential to negatively affect economies in the Asia Pacific.

China's GDP growth forecast has been revised to 6.8 per cent from 6.6 per cent for 2017 and to 6.4 per cent from 6.3 per cent for 2018. For Australia, GDP growth for 2017 may rise to 2.5 per cent from 2.4 per cent in 2016 and then 2.7 per cent in 2018.

In India, the economy decelerated in the first quarter of 2017 because of demonetization, registering a real GDP growth rate of 6.1 per cent year-on-year, down from 7 per cent in the previous quarter. However, Moody's believes that growth will be firm in the second half of 2017 as the impact of demonetization slowly diminishes. So, it has made only a marginal downward revision of India's real GDP growth forecasts to 7.1 per cent, from 7.2 per cent, for the calendar year 2017.

Moody's also revised South Korea's growth forecast to 2.8 per cent for 2017 and 2.5 per cent for 2018, up from 2.5 per cent and 2.0 per cent respectively. Its revised growth forecasts for the United States stands at 2.2 per cent in 2017 and 2.3 per cent in 2018, down from 2.4 per cent and 2.5 per cent respectively — a result of a weaker performance in the first half of the year. (DS)

Fibre2Fashion News Desk – India

More Textiles News - United States Of America...