Rating agency Fitch warns, tension will increase in the world due to China - Newztezz Online


Friday, September 15, 2023

Rating agency Fitch warns, tension will increase in the world due to China

The situation in China, the country with the world's second largest economy, is not good. The economy is continuously falling, due to which rating agency Fitch has also issued a warning. Fitch says that due to China's economy, tension may increase worldwide.

The situation of China, which boasts of its economy in the world, is not good for the last few days. Which is likely to have an impact on the global economy including China. Global rating agency Fitch has issued a warning regarding this. According to Fitch, tension will increase in the world due to the poor condition of China. Actually, everyone must have heard the news of decline in China's property market, but now the decline in property market may affect the growth of the global economy.

Let us tell you, 12 percent of China's economy belongs to the property and housing market. Now that China's housing sector is in trouble, it can sink the economy there. Let us know what is the reason behind this and how it will increase tension in the world…

China's worsening situation

The situation in China is worsening day by day. Despite being a country with the second largest economy in the world, its graph is continuously falling. There may be a decline of up to 20 percent in the sales of new houses in China this year. At the same time, the country's exports are continuously decreasing and unemployment is at its peak. Due to China's dominating attitude, foreign companies are also packing their bags from here. In such an environment, people are busy saving money instead of spending it.

This is why tension will increase in the world

Rating agency Fitch has increased the growth estimate of the global economy by 0.1 percent to 2.5 percent in 2023. However, the deepening real estate crisis in China will increase tension across the world. China was trying to get its real estate market back on track but it failed. China has invested heavily in its housing sector and 12 percent of its economy depends on this sector. At the same time, the country's exports are also continuously falling.

However, meanwhile, Fitch Ratings has maintained India's growth forecast at 6.3 percent. Fitch has said that despite the tight monetary policy and weakness in exports, the Indian economy is showing resilience. Inflation estimates at the end of the year have been increased due to the threat of El Nino. The Indian economy grew by 7.8 percent in the April-June quarter due to strong service sector activity and high demand.

What do the figures say about India's growth?

However, in the September update of the Global Economic Outlook, Fitch said that high frequency indicators suggest that India is likely to have slower growth in the July-September quarter. He says that due to cost of food items, there may be a temporary increase in inflation in the coming months. Fitch has predicted inflation to be 5.5 percent in 2023.

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