Fitch Raises Global GDP Forecast for 2023

Fitch has revised upward its forecasts on global GDP for 2023, which should increase by 2.4% rather than previously projected 2%. Instead, the estimate for 2024 is negative and dropped from 2.4% to 2.1%.

The international rating agency Fitch has raised its estimate of global gross domestic product growth for 2023 from 2% to 2.4%. The previous forecast was published in March last year.

The global economy remains flexible, but core inflation is still too high, and central banks around the world will have to continue to tighten their monetary policy in the coming months. Fitch analysts wrote about this in an updated version of their Global Economic Outlook (GEO). “The forecast for the economy in 2024 will worsen,” the Fitch report says. As a result, the agency revised down its global growth outlook from 2.4% to 2.1% in 2024. Fitch’s most optimistic estimates for the current year were driven primarily by emerging market performance: in China, from 5.2% up to 5.6%. “China’s economic recovery has slowed a bit in recent months, but consumption is returning to normal, and the macroeconomic policy is becoming softer and more flexible,” Fitch experts said. The overall outlook for emerging markets, excluding China, was improved from 2% to 2.9%. In particular, this concerns the economies of Brazil, India, Mexico, and Russia. Fitch raised its forecast on US GDP growth for the current year from 1% to 1.2%. Agency experts are projecting a slight recession in the US economy in the fourth quarter of 2023 and the first quarter of 2024. US GDP growth forecasts for 2024 are down from 0.8% to 0.5%.

On the other hand, Fitch’s expectations for the development of the eurozone countries’ economies have not changed: the agency predicts that in 2023 the region’s GDP will grow by at least 0.8% against 1.4% next year. Fitch expects the Fed and the European Central Bank to raise key interest rates twice in the coming months – to 5.75% and 4.5% (the lending rate), while the Bank of England will raise the rate to 5.25% from the current level of 4.5 %.

As for Italy, Fitch has raised its estimates for GDP growth from 0.5% to 1.1% in 2023, to 1% in 2024, and up to 1.2% in 2024. The Italian economy, writes Fitch, “recorded stronger performance in the first quarter of 2023 with a partial recovery in consumption after a sharp drop in the fourth quarter of 2022; Italy was the only one of the four big economies in the eurozone where consumption kept growing quarter after quarter.”