If oil, gas exports from Russia to Europe are cut, global economy would be thrust into recession, agency warns
Moody’s said it has lowered its global economic growth projections and raised its inflation forecasts, due to increasing commodities prices and geopolitical risks.
The global rating agency now expects the G20 economies to expand 3.6% collectively in 2022, down from its previous forecast of 4.3% in its February outlook.
Growth is expected to further slow to 3% in 2023, the agency said in its Global Macro Outlook 2022-23 March Update report on Thursday.
Russia is the only G20 economy that is anticipated to contract this year by 7%, and 3% in 2023, down from previous growth estimates of 2% and 1.5%, respectively, made before its war on Ukraine.
“In an alternative downside scenario to our baseline forecasts, in which oil and gas exports from Russia to Europe are cut, oil prices would surge and the global economy would be thrust into recession,”the agency warned.
Moody’s also said inflation expectations for the G20 advanced economies are raised, as it is forecast to be 1.8 percentage points higher on average at the end of 2022, compared to the previous estimate.
In the G20 emerging market countries, inflation is anticipated to increase 3.5% on average above the expectations made in February.