Global headwinds not a threat of recession: Moody’s


moodysDecline in oil prices accompanied with weaker expansion in Chinese economy may have have prompted a reappraisal of global economic growth prospects, but it is not a sign of global recession, stated Moody’s Investors Service.

Moody’s Senior Vice-President Elena Duggar said, “Risks to global growth have increased, but despite the recent market volatility, we don’t believe that the world’s advanced economies will enter recession.”


“While the current environment will curb growth in specific regions, it does not presage a global recession,” Moody’s said in a statement. Moody’s, in February, took negative rating action for a number of corporates, banks and sovereigns whose revenues, loan portfolio performance and tax receipts are heavily dependent on the production of oil and other commodities.


Moody’s expects growth in G-20 advanced countries to be stable at 1.8 percent for 2016 and 2 percent for 2017.


“…the positive effect of lower commodity prices to a large extent will mitigate negative factors such as weaker consumer and business confidence levels caused by increased financial market volatility, and deteriorating trade linkages with emerging markets,” it said in a report.