US credit rating agency S&P Global Ratings said on Thursday that increasing policy rates in various countries and energy insecurity in Europe are adversely affecting the economic growth of almost every country. But on the contrary, India’s economic growth rate is expected to be 7.3 percent in the current financial year and in this sense it will be a shining star in emerging market economies.
S&P said in a report that the performance of global macroeconomic factors along with tightening financial conditions amid interest rate hikes by major interest rate hikes of various countries are indicating moderation in growth in the next few quarters. According to the report, growth moderated in the second quarter across all emerging markets. The reason for this is the loss of real income of people due to inflation, loss of business confidence and the global environment has become more complex.
Central banks of emerging markets are ahead of developed countries in terms of raising policy rates. The era of raising interest rates in Latin American countries has now come to an end. Core inflation (core) continues to rise in many countries. This shows that much more needs to be done to overcome this. A sharp increase in the policy rate by the US central bank Federal Reserve has increased pressure on the balance of payments in emerging markets.
S&P said, “We have included 16 emerging economies excluding China. Their growth rate is estimated to be 5.2 percent this year. India will be a ‘star’ in this regard with a growth rate of 7.3 per cent in the current financial year (2022-23).
The rating agency said that as central banks are aggressively raising interest rates to control inflation, we are losing confidence that they can avoid a major slowdown. He said, “We now expect a slight recession in America. Interest rate hikes, energy insecurity in Europe and the lingering impact of Kovid-19 are adversely affecting growth everywhere.
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(This news has not been edited by NewsBust India team. It has been published directly from Syndicate feed.)