Fitch: The Global Economic Recovery Is Increasingly Dependent On US Economic Growth.

Beijing time on the morning of December 9th, Fitch Ratings released the latest "global economic outlook" report today.

The report points out that global economic growth is in an unbalanced state, but will increase in 2015 and 2016.

Fitch Ratings said the strong US economy is the main engine of global economic growth, while at the same time the economic situation in the euro area, Japan and many large emerging markets is unstable.

Since the September global economic outlook report released by Fitch Ratings, overall, the outlook for global economic growth has weakened slightly and is still facing downside risks.

Fitch's latest forecast for global GDP growth (weighted by market exchange rate) is: the GDP growth rate in 2014 is expected to be 2.5%, unchanged from 2013, 2.9% in 2015 and 3% in 2016.

Compared with the expectations made in the September global economic outlook, Fitch Ratings lowered its forecast of global GDP growth in 2015 and 2016 by 0.1 percentage points, mainly due to the poor performance of emerging economies.

In terms of the US economy, Fitch Ratings maintained its previous expectations, that is, the US GDP growth rate will reach 3.1% in 2015, 3% in 2016, and the fastest growth in the major developed economies (MAE). By comparison, the US GDP growth rate is expected to be 2.3% in 2014.

In the third quarter of 2014, the annualized growth rate of GDP in the US was 3.9%.

Private consumption will become the main driving force of US economic growth, supported by the growth of household disposable income and the increasing employment market.

In October, the unemployment rate in the United States dropped to 5.8%, lower than the initial target of the Federal Reserve, which will trigger its interest rate rise, which is close to the Fed's estimate of the so-called "natural unemployment rate".

At the same time, the recovery of the euro area economy is still very fragile, and the economic situation of both the marginal countries and the core member countries has shown widespread weakness.

Over the past two quarters, the German economy has seen a sharp decline. In the third quarter of 2014, the GDP growth rate dropped to 1.2% in the year to 2014, compared with an increase of 2.3% in the first quarter of 2014.

For the euro area's economic prospects, Germany's demand growth will be crucial.

Fitch Ratings predicts that the euro zone economic growth rate will be 0.8% in 2014 and 1.1% in 2015, 0.1 and 0.3 percentage points lower than those expected in the September global economic outlook report, while 2016 growth is expected to remain unchanged at 1.5%.

Although the eurozone economy is currently facing a highly relaxed ECB monetary policy and a broadly neutral fiscal stance, the deleveraging of private sector, structural bottlenecks and spillover effects from geopolitical risks have led to pressure on economic growth.

The unemployment rate will remain at a high level until 2016, which will still exceed 11%.

In the near term, the gap between the global inflation rate and the core inflation rate will expand in the global context, because the downward trend in energy prices will raise the downward pressure on the overall inflation rate.

Fitch's latest forecasts for euro area inflation are 0.6% in 2014, 0.9% in 2015 and 1.3% in 2016.

In the context of Fitch's basic assumptions, the euro zone will avoid falling into a long-term deflationary cycle. However, it is still a significant risk to consider the current low inflation rate, weak demand performance and lower target inflation rate, which may make deflation kinetic energy self enhancement.

At the same time, the fall in oil prices will play a role in boosting global economic growth.

Fitch Ratings has lowered the price of Beihai Brent crude oil futures in 2014 to $100 a barrel, and lowered its price forecasts in 2015 and 2016 to $83 and $90 a barrel respectively, as crude oil prices fell sharply in recent months, and OPEC failed to take action to try to reverse this trend.

Fitch Ratings predicts that crude oil prices will rise from the current level as demand increases (based on Fitch Ratings' hypothesis that global GDP growth will accelerate in 2015 and 2016).

If crude oil price falls by 20%, it will increase the global GDP growth rate by about 0.3% in the next two years. But while creating many winners, the drop in oil prices will also bring many losers.

Fitch Ratings also used another hypothetical scenario to explore the impact of the 20% drop in oil prices.

Emerging economies face more and more weaknesses than previously expected.

Fitch Ratings predicts that the growth rate of emerging economies will slow to 4% in 2014, compared to 4.7% in 2013, and then rise slightly to 4.1% in 2015 and further increase to 4.5% in 2016.

Brazil's economy has entered a technical recession cycle earlier this year. Fitch Ratings expects its economy to face a challenging year in 2015. Its GDP growth rate is expected to be only 1%, because the new government has tightened its economic policy to solve the imbalances emerging in recent years and restore market confidence.

Faced with pressure from western countries, oil prices and tight financial conditions, the Russian economy is expected to enter a recession cycle in mid 2015, and its GDP will fall by 1.5%.

Russia's investment activities are still in negative areas, real wage growth is close to zero, and household demand is at a standstill.

The deceleration of economic growth is structural.

China's GDP growth rate is expected to slow to 7.3% in 2014, 6.8% in 2015 and 6.5% in 2016, because China will gradually rebalance its economy and seek to curb leverage.

India will be the only country in the BRICs that will be able to accelerate economic growth in the middle of 2014. The growth rate of GDP in this country is expected to accelerate to 5.6% this year and 6.5% and 6.8% respectively next year and the following year, mainly because the government is implementing relevant reform measures in the business environment.

The Japanese economy unexpectedly slipped in the third quarter of 2014, prompting Fitch Ratings to downgrade short-term GDP expectations.

Fitch Ratings predicts that the growth rate of real GDP in Japan will be 0.8% in 2014, down 0.6 percentage points compared with the expectations made in the September global economic outlook report.

However, Fitch Ratings believes that some of the drag factors are temporary and that a wider range of factors is still constructive, which will lead to more robust economic growth.

Based on this, Fitch Ratings revised the growth rate of GDP in Japan from 1.3% in 2015 to 1.5%, while the growth rate in 2016 remained unchanged at 1.3%.

Yes

Higher wage growth will be a central factor if GDP and mingyiGDp growth will be maintained.

Britain's economic growth has been relatively strong and has a broad base.

Fitch Ratings remained unchanged, that is, in 2014, the UK's economic growth rate will be 3%, but in 2015 and 2016 it will drop to 2.6% and 2.3% respectively, returning to the medium-term potential growth rate from 2% to 2.25%.

According to the basic assumptions of Fitch Ratings, nominal wage growth in the UK will accelerate, as the sluggish factors in the job market will be absorbed and the current weaker productivity growth will be improved, consistent with the cyclical recovery of the UK economy.

Despite the tightening of the job market, there is no inflationary pressure, which means that the Fed and the Bank of England will follow a slow monetary tightening path.

In the medium term, the benchmark interest rates of major central banks of the world will remain at a low level, and will remain below 2% at least until 2016.