The international rating agency Fitch downgraded its global economic growth forecast for 2021 to 5.7% from 6% expected in September, noting the negative effects of high inflation, as well as continuing problems in supply chains.

The global GDP growth forecast for 2022 was downgraded to 4.2% from 4.4%, according to the December Global Economic Outlook (GEO) report.

“The magnitude and duration of the global inflation shock caught most experts and central bankers by surprise, and this factor is contributing to an earlier start to global monetary policy normalization,” the GEO said.

The pace of demand growth in the global economy over the past year has significantly outpaced supply growth. Due to persistent supply chain challenges, real global GDP in Q3 increased less than expected and prices increased more than expected,” the report said. Despite the deterioration in Fitch’s forecast, the global GDP growth rate of 5.7% will be the highest since 1973, and the agency’s experts believe that the world is far from stagflation.

Fitch downgraded the US GDP growth forecast for the current year to 5.7% from 6.2% and for 2022 to 3.7% from 3.9%. Eurozone GDP growth forecast for 2021 has been downgraded to 5% from 5.2%, for 2022 – left at 4.5%.

 Analysts of the agency also worsened the forecast of the rise of the Chinese economy for this year to 8% from 8.1%, for 2022 – to 4.8% from 5.2%. Experts note that the lowering of the forecast of global GDP growth for 2022 is largely due to the expected slowdown in China. Economic growth in emerging markets, excluding China, in the current year will be 5.7%, next year – 4.6%, expect in Fitch.