Inflation and War in Ukraine will reduce growth capacity of the world economy, including the US and Mexico: Fitch

The economic growth prospects for the START Mundial have deteriorated as challenges have intensified inflationary and the Russian invasion of Urania, warned analysts from the rating agency Fitch.

Now, the agency’s research team anticipates a reduction in world GDP growth of 0.7 points, to 3% from its December forecast and also lowered its expectation for the United States by 2 tenths, to leave it at 3.5 percent.

In the global expectations update, he argued that these downward adjustments reflect the drag of higher energy prices as well as a faster pace of interest rate increases by the United States.

Linked to the less dynamic performance than expected in the United States, they also cut the forecast for Mexico and now anticipate a 2% increase in GDP for this year. This forecast is 0.8 tenths below the December projection (2.8 percent).

They estimated that for the coming year, the Mexican GDP will remain unchanged for 2023, at 2% and that inflation will register a variation of 4.8% for this year and 3.5% for 2023.

The impact of the war in Ukraine, which is being led by Russia, will also be felt next year, when the firm’s experts forecast a world GDP performance of 2.8 percent.

About the challenges posed by inflation and supply shocks as bottlenecks in the supply chain continue due to the war in Ukraine, as well as the rise in oil prices, which he anticipates will remain at $150 per barrel for an extended period, will cause an abrupt tightening of Fed rates.