Global Economy to Contract 4.4% China GDP to Grow in 2020: Fitch

Fitch Ratings projected global GDP to contract 4.4 per cent in the current year but revised upwards China’s growth estimate to 2.7 per cent for 2020. In its September update to the Global Economic Outlook (GEO), Fitch Ratings cut its 2020 GDP forecast for emerging markets, excluding China, to (-)5.7 per cent, from (-)4.7 per cent estimated in June, mainly on account of a huge downward revision to India GDP forecast for the financial year ending March 2021. Fitch now expects the global GDP to fall by 4.4 per cent in 2020, less than 4.6 per cent contraction it projected in June. It projected the US GDP to contract 4.6 per cent in 2020, less than the 5.6 per cent decline expected in the June GEO. The downturn in the June 2020 quarter was slightly less severe than expected, recent consumption data have been particularly strong, and unemployment has fallen faster than anticipated, Fitch said. Fitch has slashed India’s growth projection to (-)10.5 per cent from (-)5 per cent estimated earlier after official data released last week showed the April-June 2020 quarter GDP contraction by 23.9 per cent. With regard to China, Fitch has revised 2020 GDP growth forecast to 2.7 per cent from 1.2 per cent in June following the stronger-than-expected April-June outturn and continuing recoveries in investment, housing and exports through July. “China stands out as the only Fitch 20 country, in which we expect GDP to grow in 2020, but it is important not to underestimate the positive global spillovers that will flow from China’s recovery,” it said. Fitch 20 is the group of 20 emerging and developed economies.