ID :
378570
Fri, 08/28/2015 - 07:59
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Moody's Revises Downward 2016 Global Economic Forecast

KUALA LUMPUR, Aug 28 (Bernama) -- Moody's Investors Service has revised downward, its 2016 global economic forecast, with the gross domestic product (GDP) growth in G20 economies to average 2.8 per cent, 0.3 per cent lower than envisaged previously. "In most cases our downward revisions are focused on the 2016 forecast, while in a few countries, weaker-than-expected activities in the second quarter this year has led us to revise 2015 GDP down as well," it said in a research note Friday. For China, the research house forecast GDP growth to be at 6.3 per cent next year from 6.5 per cent previously, due to some evidence that the marked slowdown in exports and investment has continued in the third quarter. "Lower growth in China together with some evidence of further weakness in economic activity in a number of other large countries are the main reason for our forecast revision," it said. Moody's said South Korea and Japan will also face dampened demand for their manufactured goods export to China, estimating both countries' 2016 GDP growth to be at 2.0-3.0 per cent and 0.5-1.5 per cent, respectively. Meanwhile, Moody's forecast for growth in the euro area remained unchanged at around 1.5 per cent in 2015 and 2016 as the linkages between China and Europe is limited. A slightly downward revision, however, was estimated for the US GDP growth in 2016, to 2.6 per cent from 2.8 per cent earlier, due to more prolonged negative activities effects from the stronger dollar and lower oil prices. It said the recent broad-based fall in equity prices will not have a direct significant impact on economic activity in most countries, including China, as these declines occurred after a long period of price increases in a number of markets. "Moreover, the wealth effects and possible impact of equity price declines so far on activity and profits in the financial sector, will be limited," it added. --BERNAMA

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