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Global economy heading to calmer waters, says Moody's
After a sustained period of turbulence in economic and financial markets, the global economy now looks set for somewhat greater stability in the coming years, says Moody's Investors Service in a report
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fter a sustained period of turbulence in economic and financial markets, the global economy now looks set for somewhat greater stability in the coming years, says Moody's Investors Service in a report.
The report, titled "Global Macro Outlook 2013-15: Navigating towards calmer waters" reviews key recent developments, provides an update on Moody's baseline forecasts for 2013 to 2015, and discusses key risks around the rating agency's forecasts.
Moody's notes that significant progress has been made to address structural imbalances since the onset of the global financial crisis. Moreover, policymakers' efforts to facilitate necessary adjustments in the private sector have borne fruit.
While significant challenges remain, with emerging economies in particular seeing deterioration in their near-term growth prospects and facing longer-term concerns in light of the eventual normalization of US monetary policy, the broad economic outlook now seems less uncertain than it has for some time, according to the report.
Moody's continues to expect a relatively modest recovery in the G-20 advanced economies, with real gross domestic product (GDP) growth of around 1.3 percent this year, followed by 2 percent in 2014 and around 2.25 percent in 2015, broadly unchanged from the August report.
In the G-20 emerging economies, Moody's forecasts for growth are somewhat weaker than they were three months ago. Overall, Moody's now expects GDP growth in the major emerging markets of around 5 percent in 2013, before rising to 5.5 percent during the subsequent two years.
"While global growth is likely to remain subdued, compared to past economic recoveries, some of the biggest risks around the economic outlook now seem to have dissipated," Moody's associate managing director Colin Ellis said in an official release.
"Recovery still cannot be taken for granted, but there are signs that a cautious optimism is starting to take hold."
