Regarding Asia, Moody’s said China’s economy stabilised around the official growth target of 6.7 per cent in 2016, but will likely continue to decelerate to 6.3 per cent and 6 per cent in 2017 and 2018.
Moody’s expects that the US economy will get additional lift from a stimulative fiscal policy stance pushing growth above potential. Accordingly, Moody’s has revised its real GDP growth forecast to 2.4 per cent in 2017 and 2.5 per cent in 2018, from 2.2 per cent and 2.1 per cent, respectively.
Moody’s forecast assumes the US Federal Reserve will raise the federal funds rate by 75-100 basis points in three to four rate hikes in 2017. “We expect the Fed to err on the side of caution and tolerate somewhat above-target inflation in the near term.
From Agencies, Featured image courtesy mindful.org
