The growth of the world economy over the next two years will remain slow, predicted by experts of the international rating Agency Moody’s.”Global economic growth continues to slow, moving to a lower long-term trend, business confidence in major economies is weak in the face of uncertainty related to trade policy. We do not expect a recession in the global economy in 2020 or 2021, However, the current economic environment is characterized by structurally low growth, low inflation and limited space for maneuver in terms of policy that makes the economy more vulnerable to negative events,” reads the Moody’s review.
The Agency predicted that GDP of the G20 (“Big twenty”) in 2020 will grow by 2.6% in annual terms, the same rate will rise by the end of 2019.
In 2021 the growth is expected to accelerate to 2.8%. In the August review, Moody’s predicted a rise of 2.7%, during current and next years.
Moody’s expects a slowdown in the two largest world economies – US and China in 2020: the U.S. growth rate next year will be reduced to 1.7% from 2.3% in 2019, and in China to 5.8% from 6.2%. In 2021, the us GDP growth accelerating to 1.9%, and Chinese – will slow to 5.7%, predicts Moody’s.
The economic recovery in the developed G20 countries, according to Moody’s, will amount to 1.6% in 2019, 1.4 percent in 2020 and 1.6% in 2021. GDP figures will be, respectively, 1.1%, and 1.2% and 1.4% in 2019, 2020 and 2021, the German economy will increase by 0.6%, 1% and 1.3%, is expected in Moody’s.
In developing countries, economic activity stabiliziruemost or even increase in 2020 and 2021, experts predict the Agency.
“We expect that economic growth in developing countries G20 in 2019 will amount to 4.3% and is the lowest since 2009 2020 growth is expected to accelerate to 4.6% in 2021 to 4.8%. Of the 10 countries included in this group, Argentina is the only one where we expect a decline in GDP in this and next year”, – stated in the review.
Moody’s confirmed the forecast of growth of Russia’s GDP by 1.2% in 2019 and 1.5% in 2020 In 2021, the pace of economic recovery in Russia is expected to accelerate to 1.7%.
Among the key risks for the world economy – the possibility of an escalation of trade disputes, the survey Agency.
“Despite the fact that the interim trade agreement between the US and China will mean progress in reducing tensions, it is unlikely to reduce the uncertainty affecting the decision-making business”, – said in the review.
The Agency’s experts note that the weakening economic growth has led to the simultaneous adoption of measures to stimulate the economy next to the world’s Central banks.
“Central banks – in both developed and developing countries – has softened its policy, and this should improve financial conditions in many countries. Despite the fact that the possibilities of monetary policy in developed countries are becoming scarcer, lower interest rates will support growth in emerging markets by increasing lending,” the review says.