Moody’s Investors Service on Thursday downwardly revised growth forecasts for Group of 20 emerging economies, citing a troubled external environment and weaker domestic demand. In an update to forecasts released in April, Moody’s cut its forecasts for growth in emerging economies to 5.2% in 2012, versus a prior projection of 5.8% growth.
For 2013, growth is seen at 5.7%, versus 6% expected in April. “We continue to expect that the slowdown in advanced economies and volatile capital flows will suppress growth in emerging markets,” said Elena Duggar, Moody’s group credit officer for sovereign risk.
Moody’s said G-20 developed countries will see growth of 1.4% in 2012 and 2% in 2013, no change to April forecasts. Moody’s said risks have risen for global economies largely due to a deeper-than-expected euro-zone recession, potential for a hard landing in emerging economies, an oil-price supply-side shock resulting from the re-emergence of geopolitical risks and sudden and sharp fiscal tightening in the U.S. in 2013.
