Connect with us

Hi, what are you looking for?

Economy

Moody’s: If the US economy turns, Europe will do well

Moody’s: If the US economy turns, Europe will do well

The international credit rating agency said that the acceleration of US economic growth will therefore have positive effects on the quality of debt among European sovereign and commercial debtors.

Notable Jorge R. Valese, Moody’s Vice President, study author, in his presentation of the analysis that using the six largest European economies – Germany, the United Kingdom, France, Italy, Spain and the Netherlands – as a test sample The company’s model accounts for a sustainable 1 percent increase in the value of GDP. The total adds 0.8 percent to the value of the gross domestic product produced by European economies.

However, according to Moody’s calculations, for every 1 percent increase in China’s GDP, Europe can expect only 0.2 percent additional GDP growth.

According to Valez, the main reason for this is that the United States is the largest trading partner of the European economy as a whole, and there is a higher level of synchronization of financial conditions and business cycles between European and American economies than in Europe. and China.

In its study, the credit rating agency said that after the severe global economic shock last year, it expects a strong recovery in both the US and Chinese economies this year: the company expects real GDP to grow by 6.5 percent in the United States and 8.5 percent in China this year.

This is also expected to benefit the European sovereign debt scenario, as higher economic growth in Europe will increase government revenue while reducing necessary fiscal spending, according to Moody’s estimates.

See also  Rather than being elegant, this Bentley Bentayga V8 S is a gritty car

The credit rating agency expects that the pass-through effects of strong growth in the US and China through potential demand boosts will be beneficial to the debt quality perception of export-oriented firms within the European corporate sector.

Other big London houses are somewhat more cautious about the short-term growth prospects for the US and China economies.

The Fitch Ratings credit rating, which was also presented in a recent revised global outlook in London, has made it likely that bottlenecks from the supplier will cause the economies of the United States and China to grow at a slower pace than previously expected this year, and thus the global economy.

Fitch said it cut its forecast for real growth in the US economy this year from 6.8 percent in its previous forecast to 6.2 percent, and pulled its forecast for China’s GDP growth rate for this year from 8.4 percent to 8.1. percent.

The company expects a 6 percent increase in global GDP in 2021 as a whole.

This is also very fast-paced growth in the global economy, Fitch stressed, but its previous forecast in June was expected to grow by 6.3 percent this year.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Top News

In a harrowing incident that has shaken the community of Lewiston, Maine, a series of shootings on Wednesday evening resulted in a tragic loss...

Top News

President Joe Biden’s abrupt departure from a speech on the U.S. economy at the White House on Monday sent a ripple of speculation and...

Top News

Given the differences in styles with next-generation consoles, the so-called “console war” between Sony and Microsoft is arguably moot. Most console players, however, will...

World

Chinese scientists have discovered a little-known type of ore containing a rare earth metal highly sought after for its superconducting properties. The ore, called...

Copyright © 2024 Campus Lately.