Fitch Solutions has slightly raised its forecasts for global economic growth in 2021 from 5.6 percent in April to 5.7 percent, before declining sharply to 3.6 percent in 2022.
In its updated insights on the global macroeconomic outlook, released in a virtual event on Tuesday, Fitch Solutions said emerging markets will see their economies grow 6 percent in 2021, before falling to 5 percent in 2022 and below in 2023 become .
Due to lower commodity prices, expected rising interest rates in emerging markets, and supply-side restraints, Fitch Solutions also expected the global economy to grow more slowly.
Developed countries were expected to lead the world in reopening their economies.
Cedric Chehab, Global Head of Country Risk at Fitch Solutions, answered Ahram Online’s questions about the top risks the global economy will face in the remainder of 2021 and 2022 and said it was about the slowdown in the world economy Vaccine adopts are turning – particularly in emerging and developing countries – financial market volatility, expected global political risks in 2022, and the extent of vaccine efficiency.
“If the vaccines were to prove inefficient, it would push all economies around the world back to lockdown measures, and it would lead to an increase in infections again,” said Chehab.
On the political risks ahead, Chehab added that it would include tensions between China and the US, the US midterm elections in 2022 and the expected elections in Japan, Italy and Germany.
He also pointed to risks related to a spike in global inflation, fueled by the continued rise in bond yields and the expected tightening of monetary policy by the Federal Reserves, adding that emerging markets are expected to hike rates in line with projected rates Rise in inflation.
Additionally, capital flows and currency performance against the US dollar in emerging markets have improved since November 2020, according to Fitch Solutions.
Fitch Solutions is expected to release its regional economic outlook, including its forecasts for the Egyptian economy, in the coming weeks.
In April, Fitch Solutions placed Egypt among five emerging markets that are not expected to recover in their tourism sector in 2021 due to the impact of COVID-19.
It also excluded Egypt from markets expected to have positive indices on inflation, commodity prices, reforms and vaccine adoption in 2021.