Fitch warns global growth will be slowest since 2009

Jessica Morris
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Fitch expects global growth to pick up in 2016 and 2017 (Source: Getty)

Credit ratings agency Fitch has warned global growth is set to be the slowest since the depths of the financial crisis this year.

Fitch said it expects the global economy will grow by just 2.3 per cent this year, the weakest since 2009, and less than the agency's June forecast. The weakness will come from recessions in Brazil and Russia, as well as a slowdown in some emerging market economies and China.

But the agency added that global growth should pick up to 2.7 per cent in 2016 and 2017, once the emerging markets recover.

Read more: Outlook for 2015 better than last year, but emerging markets are a worry for Fitch

Fitch also expects Chinese economic growth to slow from 6.8 per cent this year to 6.3 per cent in 2016, and 5.5 per cent in 2017. The credit ratings agency said investment is slowing sharply, however growth continues to be supported by robust consumption and policy easing.

"Emerging markets are becoming an increasing source of global growth risks as the collapse in commodity prices and political shocks exacerbates a secular slowdown," it said.

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Concerns over the slowing emerging market economies and China have rippled through global markets recently. They've also been haunted by the spectre of the first interest rate rise from the US Fed since 2006, something which will increase the costs of repaying their dollar-denominated debts.

Nevertheless major advanced economies will strengthen to two per cent in 2016, the fastest since 2011.

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