New Delhi: S&P Global Ratings on Thursday said rising rates and heightened European energy insecurity are affecting growth in almost every country, but India will be a ‘star’ with an estimated 7.3 per cent growth this fiscal. emerging market economies,
S&P said in a report that global macro performance over the next few quarters points to a slowdown in growth with tighter financial conditions amid rate hikes by central banks. Most of the leading and sentiment indicators are also pointing towards slow growth.
Growth in emerging markets slowed in the second quarter as inflation lowered real household income, business confidence deteriorated and the external environment became more complex.
Emerging market central banks have been ahead of their advanced-country counterparts in policy rate hikes, and in Latin America they are nearing the end of their tight cycle.
Elsewhere, core inflation continues to rise, suggesting that there is more work to be done. The recent massive hike by the US Federal Reserve is increasing balance of payments pressure in emerging markets.
“For the 16 emerging economies that we cover, excluding China, the 2022 GDP growth rate will reach 5.2 percent this year, in our view. This forecast is 30 basis points above our previous round. India is the star of this group. which has a growth rate of 7.3 percent in this fiscal year (ending March 2023),” S&P said.
The US-based agency said that as central banks aggressively raise rates to fight inflation, our confidence is waning that they can avoid creating a sharp recession.
“We are now expecting a mild slowdown in the US,” it said, adding that rising rates, escalating European energy insecurity, and the lingering effects of COVID-19 are stifling growth almost everywhere.
“This may be the most anticipated economic slowdown on record, but the data is not yet fully in place,” S&P said.
S&P said in a report that global macro performance over the next few quarters points to a slowdown in growth with tighter financial conditions amid rate hikes by central banks. Most of the leading and sentiment indicators are also pointing towards slow growth.
Growth in emerging markets slowed in the second quarter as inflation lowered real household income, business confidence deteriorated and the external environment became more complex.
Emerging market central banks have been ahead of their advanced-country counterparts in policy rate hikes, and in Latin America they are nearing the end of their tight cycle.
Elsewhere, core inflation continues to rise, suggesting that there is more work to be done. The recent massive hike by the US Federal Reserve is increasing balance of payments pressure in emerging markets.
“For the 16 emerging economies that we cover, excluding China, the 2022 GDP growth rate will reach 5.2 percent this year, in our view. This forecast is 30 basis points above our previous round. India is the star of this group. which has a growth rate of 7.3 percent in this fiscal year (ending March 2023),” S&P said.
The US-based agency said that as central banks aggressively raise rates to fight inflation, our confidence is waning that they can avoid creating a sharp recession.
“We are now expecting a mild slowdown in the US,” it said, adding that rising rates, escalating European energy insecurity, and the lingering effects of COVID-19 are stifling growth almost everywhere.
“This may be the most anticipated economic slowdown on record, but the data is not yet fully in place,” S&P said.