Home / Knowledge / News / Textiles / Moody's paints gloomy global growth forecast
Moody's paints gloomy global growth forecast
23
Feb '16
Global growth will fail to pick up steam over the next two years as the slowdown in China, lower commodity prices and tighter financing conditions in some countries weigh on the economy, Moody's Investors Service has said in a quarterly report.

The downside risks to Moody's forecasts for G20 GDP growth of 2.6 per cent in 2016 and 2.9 per cent in 2017 have increased since the rating agency's last Global Macro Outlook in November. Furthermore, G20 policymakers in some countries have limited fiscal and monetary policy space to boost growth or mitigate these risks.

"We expect global growth to rise only very modestly in 2016-17," said Marie Diron, a Moody's Senior Vice President and co-author of the report. "The negative impact of commodity producers' adjustment to persistently lower prices, a marked slowdown in China's imports and tighter financing conditions for some emerging markets will outweigh positive factors, such as accommodative monetary policy in Europe, Japan and in the US.”

“Where government budgets are hit by lower commodity prices and depreciating currencies fuel inflation, room to mitigate the downside risks is limited. In Europe and Japan, elevated government debt continues to constrain fiscal policy while the efficiency of multiple rounds of quantitative easing is already being tested." Diron added.

In China, Moody's forecasts GDP growth of 6.3 per cent in 2016 and 6.1 per cent in 2017, compared to 6.9 per cent in 2015 as the authorities use some of their available policy space to support the economy and foster a very gradual economic slowdown.

"China's slowdown will be concentrated in heavy industry sectors that are significant importers," Diron added. "As a result, the impact of the slowdown on the rest of the world - when measured in terms of the value of exports to China and profits generated there - will be sharper than implied by China's GDP growth above 6 per cent."

Moody's has revised down its GDP growth forecasts for Brazil, Russia, Saudi Arabia and South Africa. Lower oil prices, and additional fiscal tightening in order to contain government debt dynamics, account for the revisions for Russia and Saudi Arabia. In Brazil, the gains in price competitiveness and related strong export growth will not spill over to the domestic economy as long as business confidence remains at record-low levels. In South Africa, marked capital outflows in recent months reflect a lack of confidence in the government's ability to deliver growth-enhancing measures in the short term. Room for support is constrained for both fiscal and monetary policy. Moody's forecasts that GDP will shrink again this year in Brazil and Russia, by 3 per cent and 2.5 per cent respectively, growth will fall to close to zero in South Africa and will be around 1.5 per cent, the lowest in decades, in Saudi Arabia.

Must ReadView All

Courtesy: H&M

Apparel/Garments | On 30th Mar 2017

H&M group's sales increase 7% in 3 months to Feb '17

The H&M group's sales including VAT amounted to SEK 54,369 million...

Textiles | On 30th Mar 2017

Vietnam’s textile & garment exports earn $4bn in Jan-Feb

Vietnam earned $4 billion from textile and garment exports in the...

Textiles | On 30th Mar 2017

India Inc should work for July 1 GST roll out: Fin sec

The Goods and Services Tax (GST) will take India into a very exciting ...

Interviews View All

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Mukesh Agarwal & Rajesh Agarwal
Madhuram Fincap Pvt Ltd

Increasing prices and lack of demand main issues facing industry

Poojaa Kumar Deepak
Zeven

Zeven's performance sports apparel is designed for the Indian body type,...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
March 2017

March 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search