Moody's upgraded its forecast on global economy

Baku. 30 August. REPORT.AZ/ International rating agency Moody's has upgraded its forecast on global economy. 

Report informs, these updated forecasts are included in the Moody's press release.

Moody’s said the US economy has been “weaker” than expected since the start of the year, leading it to cut its forecasts for 2017 growth from 2.4 per cent to 2.2 per cent.

The ratings agency is also less confident about President Trump’s commitment to ramp up infrastructure investment, cutting its forecast for 2018 growth from 2.5 per cent to 2.3 per cent as a result of “more modest fiscal stimulus than previously assumed”. Elena Duggar, Moody’s associate managing director, cautioned that geopolitical risks could complicate the picture further.

The euro area as a whole is expected to grow around 0.3 percentage points faster in 2017 and 2018 and Moody's has revised up its growth forecasts for Germany, France and Italy.

Moody's forecasts euro area GDP growth of 2.1% in 2017 and 1.9% in 2018 after 1.7% in 2016. 

Moody's has revised up Germany's GDP growth forecasts to 2.2% and 2.0% for 2017 and 2018 respectively. 

Similarly, Moody's has raised its forecasts for France to 1.6% for both 2017 and 2018, from 1.3% and 1.4% as the recovery remains on track, driven by net exports and investment.

"A significant escalation of any of the situations in Korea, the South China Sea and other areas could have significant negative credit implications for the global economy," said Elena Duggar, an associate managing director at Moody's. Other risks include a protectionist turn by the US, and any financial market volatility stemming from sudden changes in market expectation regarding monetary policy tightening.