Global economic growth will fall by 4.4% in 2020, according to international ratings agency Fitch Ratings, a slight upward revision from the 4.6% decline it projected in a previous report in June.

A slight recovery was seen after the peak period of the pandemic in March and April “but we expect the pace of expansion to moderate soon,” the agency said in a statement late on Monday.

Brian Coulton, a chief economist at the agency, said China’s economy has regained its pre-pandemic level and some European countries have exceeded February levels, but there is still doubt over a V-shaped recovery.

“Unemployment shocks lie ahead in Europe, firms are cutting capital expenditures, and social distancing continues to directly constrain private-sector spending,” he said.

The agency revised its GDP expectation target for the US from -5.6% to -4.6% and from 1.2% to 2.7% for China.

Fitch also revised GDP forecasts for the eurozone to -9% from -8%, the UK to -11.5% from -9%, and for emerging markets – excluding China – to -5.7% from -4.7%.

“The latter primarily reflects a huge change in our India forecast for the fiscal year-ending March 2021 to -10.5% from -5.0%,” read the statement.

Coulton further said: “We do not expect the pace of expansion in recent months to continue, as the boost from reopening fades, labor market dislocations constrain consumer spending, and firms retrench on capital expenditures.

“And with the virus outbreak not yet contained, social distancing behavior and ongoing restrictions will drag on activity.”

Since originating in China last December, COVID-19 has infected millions and claimed hundreds of thousands of lives around the world.

Measures to stem its spread hit several sectors deeply, especially travel, tourism, and manufacturing.

Forecast for next 2 years

Fitch’s world economy projections for 2021 and 2022 are 5.2% and 3.6%, respectively.

The eurozone, developed, and emerging economies are expected to grow by 5.5%, 4.3%, and 6.6% next year, and 3.2%, 2.8%, and 4.7% in 2021, respectively.

The agency’s expectation for the US economy is 4% and 3% for the coming two years, while the Chinese economy is projected to see a 7.7% growth rate in 2021 and 5.5% in 2022.

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