Home / Knowledge / News / Textiles / 'Global economic growth in next 2 years to remain muted'
'Global economic growth in next 2 years to remain muted'
18
Aug '15
Global economic growth will be muted over the next two years, Moody's Investors Service has said in a quarterly report.

According to the report titled “Global Macro Outlook 2015-16: Risks to muted global growth from Chinese asset price deflation, US rate increase, and Greece's possible euro exit", the rating agency maintains its baseline forecast for G20 GDP growth at 2.7 per cent this year, rising to around 3 per cent in 2016, compared to 2.9 per cent in 2014. These 2015-16 growth forecasts are still below the G20's average growth rate before the financial crisis, and Moody's does not expect growth in the G20 to return to those pre-crisis averages within the next five years.

"The recovery in the US and, to a lesser extent, the euro area and Japan, will be offset by the ongoing slowdown in China, low or negative growth in Latin America and only a gradual Russian recovery from its recession this year," said the report's author Marie Diron, senior vice president, Credit Policy. "A sharp or long-lasting correction in asset prices in China is one of the risk factors which could result in lower G20 growth than in our baseline forecasts."

The main downside risks to Moody's Global Macro Outlook over the next two years relate to a possible further marked correction in Chinese equity and property prices, a disorderly response to the US Federal Reserve's anticipated policy tightening and a Greek exit from the euro area. All these risks would have a marked negative effect on the global economy compared with our current forecasts.

In China, Moody's maintains its baseline GDP growth forecast of 6.8 per cent this year and 6.5 per cent in 2016, before falling towards 6 per cent by the end of the decade. The recent stock market correction is unlikely to have a significant impact on China's GDP growth. The depreciation of the yuan so far will also not have any marked economic impact, the report said.

Moody's forecast is that US growth will be at 2.4 per cent in 2015, before rising to 2.8 per cent in 2016. Robust job creation, high corporate profits, favourable financing conditions and pent-up demand all point to higher GDP growth.

Moody's euro area forecast is for growth of 1.5 per cent in both 2015 and 2016. The weaker euro and lower oil prices have given a boost to the region's economy. However, there is no evidence from either increased investment, labour productivity or faster than usual employment growth that structural reforms have markedly lifted the region's growth potential yet.

Japan is one of the few countries that has seen its growth forecast revised up by Moody's this quarter. However, at the global level, this is offset by sizeable downward revisions for countries such as Brazil, Indonesia, Korea and Mexico in 2015-16.

The gradual global economic recovery has an impact on oil markets. The increase in world oil supply continues to outpace demand and Moody's has revised down its oil price assumptions. Moody's now expects the Brent price to average $57 a barrel in 2016, only a little higher than the 2015 average of $55. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Sri Lanka’s apparel exports rise after EU GSP+ reinstatement

Apparel/Garments | On 18th Nov 2017

Sri Lanka’s apparel exports rise after EU GSP+ reinstatement

Sri Lanka’s apparel exports from January to September 2017 has...

Bangladesh plans 2 leather estates in Rajshahi, Chittagong

Apparel/Garments | On 18th Nov 2017

Bangladesh plans 2 leather estates in Rajshahi, Chittagong

Bangladesh Prime Minister Sheikh Hasina has said two more leather...

ASEAN, Hong Kong sign free trade agreement

Textiles | On 18th Nov 2017

ASEAN, Hong Kong sign free trade agreement

The Association of Southeast Asian Nations (ASEAN) and Hong Kong...

Interviews View All

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Kaizad Hansotia
GetNatty

Competition is the best thing that can happen to a startup

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Eamonn Tighe
Nature Works LLC

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

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

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

November 2017

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
68.5%
No
12.4%
Skip
19.1%

Total Votes: 89

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.8%
No
30.3%
Skip
7.9%

Total Votes: 89

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
86.5%
No
10.1%
Skip
3.4%

Total Votes: 89

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
80.9%
No
9.0%
Skip
10.1%

Total Votes: 89


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search