Daily Management Review

Moody's: Global economy will slow down in 2019


11/06/2018


The growth rate of the world economy in 2018 will reach 3.3%, and in 2019 it will slow down to 2.9%, which will make it difficult for some countries to solve their macroeconomic problems, the report of the international rating agency Moody's says.



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"Moody's expects that the growth rate of the world economy in 2018 will reach its maximum value of 3.3%, and in 2019 it will slow down to 2.9%. According to the agency, in the advanced economies of the G20, economic growth rates will fall from 2.3% in 2018 to 1.9% in 2019, and events will develop according to this scenario in all key economies, including the United States and Germany", the document says.

In the developing countries of the G20, growth rates are noticeably higher, but there will be the same tendency: in 2019, the average growth rates of their GDP will be 4.6% versus 5% in 2018.

"The slowdown in economic growth means that the window of opportunity is closing, when states could take measures to solve accumulated problems, such as high levels of public and private debt, as well as problems caused by long-term trends of population aging and income inequality," the agency said.

In general, Moody's forecast for the creditworthiness of the sovereign sector in 2019 is "stable." Currently, three-quarters of the 138 countries rated by the agency have a “stable” rating outlook, in 15 states it is “positive” and in 19 countries it is “negative.”

“The “stable” outlook on sovereign ratings for 2019 reflects both the continuing growth of the global economy and the growth of domestic political and geopolitical risks. Despite a generally stable outlook, we are more than in previous years, paying attention to the risk of unanticipated shocks, which can destabilize the economic and financial situation in the next 12-18 months," the document contains a statement by the managing director of the international sovereign risk assessment team at Moody's, Alastair Wilson.

The agency indicates that, as in previous years, unforeseen domestic political and geopolitical events constitute a "key residual risk." In addition to the economic and fiscal indicators of a country, geopolitical risks can affect international capital flows, and consequently, the funding conditions for many states.

source: moodys.com






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