RIYADH: Global credit agency Moody’s has slashed growth forecasts for G20 economies and expects real gross domestic product to rise 2.5 percent in 2022, down from its May projection of 3.1 percent.
As financial conditions tighten, the firm’s GDP forecast for 2023 has also been cut to 2.1 percent, down from 2.9 percent, according to a statement.
“Global monetary and financial conditions will remain fairly restrictive through 2023,” Madhavi Bokil, senior vice president at Moody’s, said in the report.
“Central banks will require decisive proof that high inflation no longer poses a threat to their policy objectives before letting up on their tight monetary stance. The challenging global economic environment of today will be resolved with a sharp and disinflationary slowdown in economic growth,” she added.
This happens as economic outlooks have deteriorated because of tighter global financial conditions and energy and commodity price shocks resulting from Russia’s invasion of Ukraine.