Fitch Ratings predicts the economic growth of advanced economies to slow to 1.3% in 2011 and 1.2% in 2012.
A “modest acceleration” is predicted for 2013, although still only at 1.9%, in the company’s latest Global Economic Outlook.
The ratings agency has also revised down its growth expectations for the global economy, from 2.7% in 2012 to 2.4% and from 3.1% in 2013 to 3%.
“Fitch expects growth in the eurozone to weaken further to just 0.4% in 2012 owing to increased fiscal austerity measures and deteriorating financial market conditions feeding into tighter credit conditions for the broader economy,” according to Gergely Kiss, director in Fitch’s Sovereign team.
“Outright contraction of the eurozone economy in 2012 is now a one in three possibility,” says Kiss. The UK will experience growth of 0.7% in 2012 and 2% in 2013.
The Office for Budget Responsibility (OBR) recently downgraded growth expectations for the UK to a slightly higher level of 0.9%.
In contrast, the growth expectations of BRIC (Brazil, Russia, India & China) countries are predicted to be “robust over the forecast horizon”, with 6.3% for 2012 and 6.6% in 2013.
The agency has warned that the economies of both China and Russia will slow over the next few years and that further tail events with severe consequences have increased in recent months, threatening the global economy.