Home / Knowledge / News / Textiles / Moody's revises G20 economic growth forecast downwards
Moody's revises G20 economic growth forecast downwards
02
Sep '15
Moody's Investors Service has revised downward its forecast for GDP growth in the G20 economies to 2.8 per cent next year, from 3.1 per cent. In a report titled "Downward Revisions to 2016 Global Economic Outlook," Moody's says that the revision mainly reflects the impact of a more marked slowdown now forecast in China and more prolonged negative effects of low commodity prices on G20 producers than earlier expected.

Moody's has slightly revised downwards its GDP growth forecast for China in 2016 to 6.3 per cent, from 6.5 per cent previously. Recently published economic indicators show that China's slowdown in exports and investment has continued into Q3 2015. In addition, signs that employment growth is weakening point to a more marked and broadly-based deceleration in the Chinese economy than previously expected.

Ongoing policy support from the Chinese government is likely to only partly offset the underlying slowdown in the Chinese economy, according to the rating agency.

"Slower growth in China makes a significant rebound in commodity prices in the near term unlikely. A more prolonged period of low commodity prices will lead to muted export revenues and investment for commodity-exporting G20 economies." says Marie Diron, a senior vice president at Moody's.

Moody's now expects negative GDP growth in 2016 in Brazil and Russia, extending the 2015 recessions. The recent fall in commodity prices and further depreciation of the currencies exacerbate an already unfavourable domestic economic environment in both countries. At -1 per cent/0 per cent for Brazil and -1.5 per cent/-0.5 per cent for Russia Moody's 2016 forecast ranges are now 0.5 and 1 percentage point lower than in the previous forecast.

Korea and Japan will face dampened demand for their manufactured goods exports from China. More generally, a more marked slowdown in China, a major trade partner for both economies, will likely weigh on corporates' and consumers' willingness and ability to spend, hampering domestic demand. In Korea, the rating agency forecasts GDP growth of around 2.5 per cent in 2015 and 2016, while in Japan GDP it forecasts growth of around 0.5 per cent and 1 per cent in 2015 and 2016 respectively.

The trade linkages between China and the US and Europe are limited, despite a rapid increase in trade over the past 15 years, according to Moody's. The slight downward revision to the US forecast in 2016, to 2.6 per cent from 2.8 per cent previously, is accounted for by more prolonged negative effects of the stronger dollar and lower oil prices than previously expected.

The report also noted that while the broad-based equity price falls could have a negative impact on investor and consumer sentiment, they will not have a direct significant impact on economic activity in most countries, including in China. (SH)

Fibre2Fashion News Desk – India

Must ReadView All

Textiles | On 20th Jan 2017

TEA expects budget to upscale textile skill industry

The Tiruppur Exporters’ Association (TEA) has requested the Central...

Textiles | On 20th Jan 2017

Bangladesh could earn $60 billion in exports by 2021

Bangladesh is expected to earn over $60 billion in exports by the...

Courtesy: PIB

Textiles | On 20th Jan 2017

Govt to help Tangaliya weavers purchase looms: Irani

Government of India will facilitate Tangaliya weavers in purchase of...

Interviews View All

Mukesh Agarwal & Rajesh Agarwal
Madhuram Fincap Pvt Ltd

Increasing prices and lack of demand main issues facing industry

Sanjay Yagnik
Maa Tex Speciality

‘We suggest reducing dosage of sizing chemicals to reduce sludge...

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Judy Frater
Somaiya Kala Vidya

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

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Bani Batra

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

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
January 2017

January 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