Fitch boosts growth and inflation expectations
“We have raised our growth forecasts for 2021 for most developed economies, with the United States revised to 6.8% from 6.2%, the euro area to 5.0% from 4.7% and the United States United at 6.6% vs. 5.0%, “Fitch said, noting that Japan is the only major economy to see a downward revision (to 2.5% vs. 3.6% in the previous outlook) .
Fitch’s forecast for China is unchanged at 8.4%, but its call for other emerging markets was reduced to 5.9% from 6.0% due to lower forecast for India, the Indonesia and Turkey – although this was partly offset by upward revisions for Brazil, Mexico, South Africa and Korea.
Against the backdrop of a faster recovery, inflation is rising, but Fitch expects this to be temporary as growth slows in 2022.
“Slower growth, supply adjustments in bottleneck sectors, a return to the consumption of services and the mitigation of the effects of US fiscal stimulus are expected to lead to lower inflation rates. in 2022, ”Fitch said, noting that he expects global growth to slow to 4.3% soon. year.
Fitch expects U.S. consumer inflation to hit 4.1% by the end of 2021, falling to 2.2% by the end of 2022, before rising to 2.5% in 2023 “as production exceeds its potential after the labor market fully recovered in late 2022.”
The rating agency also expects the US Federal Reserve to raise rates in the fourth quarter of 2023, a year earlier than its previous expectations.
“The [European Central Bank] will not track and likely continue asset purchases until 2023, as eurozone inflation remains below target, ”Fitch said.