Fitch raises global GDP growth forecast

Fitch Ratings expects global GDP to expand by 6.1 percent in 2021, revised up from 5.3 percent in Fitch’s December 2020 Global Economic Outlook (GEO), Report informs referring to the rating agency.

“Global growth prospects are improving as fiscal support is stepped up sharply, economies adapt to social distancing and vaccination rollout gathers momentum,” reads the report.

Fitch expects US GDP growth to be 6.2 percent in 2021 (revised up from 4.5 percent), China at 8.4 percent (from 8 percent), the eurozone at 4.7 percent (unchanged) and EM excluding China at 6 percent (up from 5 percent).

“GDP outturns were stronger than expected in 4Q20 - particularly in Europe and emerging markets (EM) - and world GDP declined by 3.4% in 2020 as a whole, compared to our previous forecast of a 3.7% decline,” reads the GEO.

The main driver of the global forecast revision is the much larger-than-expected fiscal stimulus package recently passed in the US. The $1.9 trillion price tag represents more than 2.5% of global GDP.

Fiscal support is stepped up sharply, economies adapt to social distancing and vaccination rollout gathers momentum, said Fitch Ratings.

Vaccine rollout has gained momentum, particularly in the UK and US. The eurozone has had a slower start but the program should accelerate in 2Q21, according to Fitch.