Fitch Ratings has changed its forecasts for currencies, oil prices and GDP growth in 2020-2021
The international rating agency Fitch Ratings published on Tuesday, May 26, "Global Economic Outlook" (GEO). According to the document, Fitch expects the average Brent price to be US$35 per barrel for the current year and US$45 per barrel for 2021, as in the April release. This is 45% and 29.8% respectively below the 2019 average.
Updated currency forecast
The euro/dollar exchange rate will reach 1.0870 by the end of the year. It will remain close to this level for the next 2 years.
The dollar/yen exchange rate will make 107.00 by the end of 2020, which corresponds to the current quotes in this currency pair.
The british pound/dollar exchange rate will fall to 1.2000 by the end of the year.
The dollar/yuan will reach 7,1000 at the end of this year and will rise to 7,2000 in another 12 months.
Economic growth forecast
World GDP in 2020 will fall by 4.6% yoy. A month ago, the agency predicted a 3.9% yoy decline.
World GDP in 2021 will increase by 5.1% yoy due to low base in 2020.
Eurozone GDP will decline by 8.2% in 2020. In April, Fitch projected a 7% yoy decline in economic growth in the region.
Spain's GDP will decrease by 9.6% (compared to -7.5% in GEO at the end of April).
Italy's GDP will drop by 9.5% (compared to -8.0% at GEO at the end of April)
France's GDP will decrease by 9.0% (compared to -7.0% in GEO at the end of April)
Since the end of April, GDP growth projections for 2020 for China, the USA and Japan remained unchanged at 0.7%, -5.6% and -5.0%, respectively.