November 2021: Global Growth Shifting to Lower Gear as Inflation Remains Sticky

• Fitch Solutions’ forecast for global growth in 2021 edged lower in November to 5.5% from 5.6% in October, largely on the back of several downward growth revisions to the US (6.0% to 5.6%), Germany (3.7% to 2.8%), Spain (6.8% to 5.0%), Mexico (6.0% to 5.7%) and Saudi Arabia (3.0% to 2.8%). 
• These downward revisions were partially offset by upward revisions to several large economies, including France (5.9% to 6.8%), Italy (4.6% to 6.2%), Malaysia (0.0% to 1.5%), Russia (3.4% to 3.8%) and Turkey (6.3% to 8.3%). Fitch’s global growth forecasts for 2021 (5.5%) and 2022 (4.2%) remain slightly below consensus estimates of 5.9% and 4.5% respectively. 
• The latest high frequency and GDP data pointed to a slowdown in economic activity in Q321 due to a combination of less favourable base effects, supply chain-related challenges and new COVID-19 outbreaks, which forced several economies to re-impose partial restrictions. 
• Moreover, the recent increase in energy prices has weighed on output in a number of economies, further curbing growth momentum. The good news is that the latest purchasing managers' index (PMI) readings show that activity started Q421 on a stronger footing, pointing to a still-strong global economic performance in the last quarter of 2021.

(Source: Fitch Solutions)