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Moody’s downgrades the global economy

31 August 2012 11:12 (UTC +04:00)

Baku. Ali Ahmadov â€“ APA-Economics. A bit late compared to other research groups and agencies that track the global economy, Moody’s has added significantly to its reasons for a likely slowdown in the growth of the G20 nations and has said emerging markets are at extreme risk of stumbling. The firm also has increased its opinion that much of the world faces a more economic damage.

In a report called "Update to the Global Macro-Risk Outlook 2012-2013: Euro Area Debt Crisis Continues to Pose the Greatest Risk."

The greatest worry about the economic problems in emerging nations is for the prospects of China, India and Brazil. Moody’s cut the growth rate among emerging markets as a whole from 5.2% for the balance of 2012 from an April estimate of 5.8%. For 2013, the rate was chopped from 6% to 5.7%.

The list of risks to the global economy contains several factors that are beyond the worrying stage. Europe’s "contraction" is well along as a severe recession, at least among many of its financially weakest nations. Political gridlock is already part of the American political process and likely will be into next year. The U.S. fiscal cliff problem has slowed the investment of businesses and may well undermine consumer spending over the critical holiday season. Some of the shocks to oil prices are severe enough that G7 finance ministers have called on the largest oil-producing nations to increase exports right away.