Fitch published the September issue of its Global Economic Outlook Report with the title "Supply Shocks and Inflation Hit the World Economy Hard".
In the report, it was noted that the gas crisis in Europe, high inflation and the sharp acceleration in global monetary policy tightening dealt a heavy blow to economic expectations.
In the report, where the growth forecasts for the global economy were lowered, it was reported that the world economy is expected to grow 2.4 percent this year, 1.7 percent in 2023 and 2.8 percent in 2024.
Fitch predicted that the global economy would grow by 2.9 percent in 2022 and 2.7 percent in 2023 and 2024 in its forecasts announced in June.
Recession forecast for Eurozone and USA
In the report, it was pointed out that the Eurozone and the UK are expected to enter recession at the end of this year, while the USA is expected to experience a mild recession in mid-2023.
In the report, which stated that the 2022 growth forecast of the US economy was reduced from 2.9 percent to 1.7 percent, it was stated that the country's 2023 growth expectation was reduced from 1.5 percent to 0.5 percent. It was reported that the growth expectation of the USA for 2024 was increased from 1.3 percent to 1.7 percent.
In the report, it was noted that the 2022 growth forecast of the Eurozone economy was increased from 2.6 percent to 2.9 percent. In the report, which stated that the Eurozone economy, which was previously expected to grow by 2.1 percent in 2023, is expected to shrink by 0.1 percent next year, the growth forecast of the region's economy for 2024 was increased from 2.1 percent to 2.3 percent.
Growth forecasts for the Chinese economy were also revised downwards.
In the report, it was stated that the recovery of the Chinese economy was limited by the quarantine measures implemented against the Kovid-19 epidemic and the collapse in the real estate sector.
In the report, it was stated that the growth forecast of the Chinese economy for this year was reduced from 3.7 percent to 2.8 percent, and the expectation for 2023 was reduced from 5.3 percent to 4.5 percent. It was noted that the 2024 growth forecast of the Chinese economy was reduced from 5 percent to 4.7 percent.
Turkey's growth forecast for 2022 has been raised
In the report, which also includes evaluations on the Turkish economy, it was reported that the country's economy grew strongly in the second quarter of this year with strong consumption and export growth.
In the report, it was noted that the Turkish economy is expected to grow by 5.2 percent this year and by 2.9 percent in 2023 and 2024.
Fitch, in its forecasts in June, had predicted that Turkey would grow by 4.5 percent this year, 3 percent in 2023 and 2.9 percent in 2024.
Policy rates are rising much faster than expected
High and persistent inflation, rising short-term inflation expectations and tight labor markets have caused the US Federal Reserve (Fed), Bank of England (BoE) and European Central Bank (ECB) to become more hawkish in recent months, the report said.
In the report, which stated that policy rates increased much faster than expected, the Fed's interest rate hike to 4 percent by the end of the year and keeping it there throughout 2023, the ECB's refinancing rate to 2 percent until December and the BoE's interest rate to February 2023. It was recorded that it is expected to increase to 3.25 until .