Latest news with #GlobalEconomicOutlook
Fibre2Fashion
3 days ago
- Business
- Fibre2Fashion
PBoC likely to cut key rate further as policy eases, says Fitch
People's Bank of China (PBoC) is expected to make further cuts to its seven-day reverse repo (RR) rate in 2025, following a reduction from 1.5 per cent to 1.4 per cent on May 9, according to Fitch Ratings. The move aligns with the central bank's shift from a 'prudent' to a 'moderately loose' monetary stance, as announced in December 2024. The PBoC also reduced the Reserve Requirement Ratio for large banks to 9 per cent from 9.5 per cent. Fitch has updated its Global Economic Outlook (GEO) to reflect the seven-day RR as China's primary policy interest rate, replacing the Medium-Term Lending Facility (MLF) rate due to structural changes in its implementation. If MLF rate forecasts were applied mechanically, the RR rate could fall to as low as 0.5 per cent by the end of 2025, Fitch said in a press release. Despite a move towards a more price-based policy framework, the PBoC continues to use both price- and quantity-based tools. The central bank reaffirmed the role of the seven-day RR rate as its main policy rate and has created a tighter corridor for interbank rates, with overnight repo and reverse repo operations pegged 20 basis points below and 50 basis points above the RR rate, respectively. PBoC may implement further cuts to its seven-day reverse repo (RR) rate in 2025, following a reduction to 1.4 per cent in May, according to Fitch Ratings. This aligns with its shift to a 'moderately loose' monetary stance. Fitch now considers the seven-day RR as China's main policy rate. Although deep cuts are projected, easing could be constrained by recent US-China trade de-escalation. While aggressive easing is anticipated, the recent easing in US-China trade tensions may moderate the extent of future rate cuts. Fibre2Fashion News Desk (KD)
Fibre2Fashion
28-05-2025
- Business
- Fibre2Fashion
Fitch lowers EM10 growth to 3.9%, China drives revision
The GDP-weighted average potential growth forecast for ten key emerging markets (EMs) has been revised down to 3.9 per cent from 4.0 per cent, Fitch Ratings said in its latest Global Economic Outlook. Fitch Ratings has cut the GDP-weighted average potential growth for 10 key EMs to 3.9 per cent from 4.0 per cent, mainly due to China's downgrade to 4.3 per cent. Mexico, Indonesia, and Korea also saw downward revisions, while India, Brazil, Russia, and Poland received upgrades. India's pandemic scarring was reduced to 5.4 per cent. South Africa and Turkiye estimates remain unchanged. The slight reduction is primarily due to a downgrade in China's growth potential, now estimated at 4.3 per cent—down from 4.6 per cent projected in the 2023 edition. The revision for China had been signalled earlier in a special report released in November 2024. Fitch also downgraded supply-side potential growth estimates for Mexico (from 2.0 per cent to 1.8 per cent), Indonesia (from 4.9 per cent to 4.7 per cent), and Korea (from 2.1 per cent to 1.9 per cent). However, these reductions were balanced by upward revisions in four economies—India, Brazil, Russia, and Poland. India's potential growth has been revised upwards to 6.4 per cent from 6.2 per cent, supported by stronger-than-expected post-pandemic recovery and a reduced cumulative negative 'level shock' to its GDP, the rating agency said in a release. Fitch now estimates India's scarring impact from the pandemic at a total of 5.4 per cent (2.7 per cent in each of 2020 and 2021), down from the previous estimate of 7 per cent. Brazil's potential growth has been raised to 2.0 per cent from 1.7 per cent, while Russia sees a notable increase to 1.2 per cent from 0.8 per cent. Poland's projection improves slightly to 3.2 per cent, up from 3.0 per cent, due to a stronger contribution from capital deepening. On an unweighted basis, the average potential growth across the EM10 now stands at 3.1 per cent. Meanwhile, potential growth estimates for South Africa and Turkiye remain unchanged at 1.0 per cent and 4.1 per cent, respectively. Fitch's estimates continue to factor in the pandemic-related output losses in 2020 and 2021 for Mexico, South Africa, India, and Indonesia. While these 'level shocks' remain, India's robust economic rebound has prompted a reassessment of its long-term scarring, indicating greater resilience in the aftermath of COVID-19. Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged. Fibre2Fashion News Desk (HU)
&w=3840&q=100)
Business Standard
22-05-2025
- Business
- Business Standard
Fitch upgrades India's medium-term growth outlook to 6.4% till FY26
Fitch Ratings on Thursday revised India's medium-term GDP growth potential till FY2026 upwards to 6.4 per cent, from its earlier projection of 6.2 per cent. 'We have increased potential growth in India by 0.2pp to 6.4 per cent as higher estimates for labour force participation more than offset a lower contribution from labour productivity,' the ratings agency said, while noting that there has been 'less pandemic scarring in India'. Fitch Ratings has slightly lowered its medium-term potential GDP projections over the next five years for the 10 emerging market economies covered in its Global Economic Outlook. 'Our update of potential growth in emerging markets is now 3.9 per cent, representing a further, albeit marginal, drop from the 4 per cent estimate we published in November 2023. This mainly reflects lower potential growth in China,' said Robert Sierra, Director, Fitch Ratings. Fitch expects total factor productivity in India to slow from recent years, reverting to its long-run average of 1.5 per cent. It also anticipates India's labour force participation rate will continue to increase, albeit at a slower pace. 'Our revised estimate implies that there is a stronger contribution from labour inputs (total employment) rather than labour productivity,' the Fitch Ratings report stated. Meanwhile, the agency has maintained its lower growth projection for China at 4.6 per cent due to weaker capital deepening, as the property market adjustment continues to weigh on overall investment.
The Print
22-05-2025
- Business
- The Print
Fitch raises India's average growth potential to 6.4 pc till 2028
In its updated forecast, Fitch upped India's average growth estimate for 2023-2028 to 6.4 per cent, from 6.2 per cent. 'The Indian economy bounced back more strongly than we expected at the time of the 2023 report, suggesting a less adverse 'scarring' impact from the pandemic shock,' Fitch said while updating the five-year-ahead potential GDP projections. New Delhi, May 22 (PTI) Fitch Ratings on Thursday raised India's average annual growth potential till 2028 to 6.4 per cent, from 6.2 per cent estimated in November 2023. It said Fitch Ratings has slightly lowered its medium-term potential GDP projections over the next five years for the 10 emerging market economies covered in the Global Economic Outlook (GEO). 'Our new projection sees growth at 3.9 per cent on a GDP weighted basis, down from 4 per cent in our previous assessment published in November 2023,' it said, adding that 'Our unweighted average EM10 potential growth projection is 3.1 per cent, just higher than the 2023 report.' PTI JD DRR This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
&w=3840&q=100)
Business Standard
22-05-2025
- Business
- Business Standard
Fitch Ratings raises India's average growth potential to 6.4% till 2028
Fitch says the Indian economy rebounded stronger than expected, showing less pandemic "scarring" as it updates its five-year potential GDP projections Press Trust of India New Delhi Fitch Ratings on Thursday raised India's average annual growth potential till 2028 to 6.4 per cent, from 6.2 per cent estimated in November 2023. "The Indian economy bounced back more strongly than we expected at the time of the 2023 report, suggesting a less adverse "scarring" impact from the pandemic shock," Fitch said while updating the five-year-ahead potential GDP projections. In its updated forecast, Fitch upped India's average growth estimate for 2023-2028 to 6.4 per cent, from 6.2 per cent. It said Fitch Ratings has slightly lowered its medium-term potential GDP projections over the next five years for the 10 emerging market economies covered in the Global Economic Outlook (GEO). "Our new projection sees growth at 3.9 per cent on a GDP weighted basis, down from 4 per cent in our previous assessment published in November 2023," it said, adding that "Our unweighted average EM10 potential growth projection is 3.1 per cent, just higher than the 2023 report. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
