S&P Lowers GDP Growth Forecast For Emerging Markets

S&P Global Ratings lowered its growth forecast for emerging markets (EMs) due to the economic effects of the ongoing Russia-Ukraine war, the credit rating agency said in its latest report.

Amid rising energy prices, along with weakening trade and financing conditions, the agency lowered its real GDP growth forecast for EMs overall to four per cent for this year and 4.3 per cent in 2023, according to the report it released on Friday.

The 2022 figure in its previous forecast had been 4.8 per cent and, for next year, it had been 4.4 per cent.

“The six largest Latin-American economies are set to see growth this year of 1.7 per cent, marking a downward revision from S&P Global Ratings’ previous two per cent forecast,” it noted.

The agency projected consumer price inflation in the median EMs to be 1.2 percentage points higher in 2022, compared with its previous inflation forecast from November.

“And such rising inflationary pressures and financing costs may impede fiscal consolidation, strain governments’ credit quality, and erode credit fundamentals,” it underlined.