Update | Ratings agency Fitch cuts global growth forecast to 2.3 per cent, weakest since financial crisis

In the face of  China’s weakening economy, ratings agency Fitch has cut its global growth forecast for this year to 2.3 per cent from 2.4 per cent, its weakest estimate since the financial crisis in 2009, the agency said yesterday.

Fitch also slashed its gross domestic product forecast next year  to 6.3 per cent from 6.5 per cent, although its numbers for this year remain  unchanged at 6.8 per cent.

The adjustment came amid  signs of weakness in some of China’s forward-looking indicators. Fitch has cut its growth forecast for 2017 to 5.5 per cent from 6 per cent based on a reassessment of the economy’s medium-term adjustment path.

 Andrew Colquhoun, the head of Asia-Pacific sovereigns at  Fitch, said the global GDP cut was largely driven by pressures on emerging markets including recession in Brazil and Russia, and structural adjustment in China.

“Growth in the major advanced economies is projected to pick up into 2016 but with downside risk from any rebound from the weakness in emerging markets,” Colquhoun said.

“However, the picture for emerging markets is not uniformly gloomy and some countries including India, the Philippines and Vietnam are less exposed to the current conjunction of risks.”