LONDON: Rating agency S&P Global cut its emerging market growth forecasts on Monday, predicting a 4.7pc slump on average this year due to the coronavirus and warned that all countries would be left with permanent scars too.
The firm said the downward GDP revisions mostly reflected the overall worsening pandemic for many emerging markets and a larger hit to foreign trade compared to its last set of expectations in April that predicted a 1.8pc contraction.
“We project the average EM GDP (excluding China) to decline by 4.7pc this year and to grow 5.9pc in 2021. Risks remain mostly on the downside and tied to pandemic developments,” S&P said.
It added that there would permanent output losses from the pandemic for all emerging markets, with the gap relative to pre-Covid GDP path as large as 11pc in India, 6pc-7pc in most of Latin America and South Africa, 3pc-4pc in most of Emerging Europe, and 2pc in Malaysia and Indonesia.
