Fitch revises down US growth forecast

By Ovunc Kutlu

NEW YORK (AA) – U.S. economic growth forecast was revised down to 1.4 percent, Fitch Ratings announced Monday at its Global Economic Outlook for September.

"This year is likely to see the lowest annual growth rate for the U.S. GDP since 2009," Brian Coulton, chief economist at Fitch, said in the report.

He pointed to the oil sector that is still under the pressure of low oil prices and the rise in the dollar which had a negative effect on the U.S.'s industrial sector.

The global rating agency anticipated the U.S. economy to grow 1.8 percent in its July outlook.

The report also stressed that downside risks toward advanced countries' economic growth have risen in recent months.

"The rise in populism seen in many advanced countries could be a precursor to increased trade-protectionism and growing fragmentary tensions in the eurozone, both of which would increase uncertainty and damage prospects for private sector investment," Coulton said.

Fitch expects the Federal Reserve to be the only major central bank among advanced countries that would be tightening monetary policy in the near term, with the possibility of a rate hike in December.

The Bank of Japan's (BOJ) new monetary policy paves the way for further cuts in its interest rate, while the European Central Bank (ECB) is anticipated to extend its quantitative easing program beyond its pre-scheduled date of March 2017.

The Bank of England (BoE), however, is not expected to cut its interest rate again this year, according to Fitch.

The rating agency's figures also show Turkey's GDP is set to increase while inflation is expected to decrease there in the next few years.

Fitch forecasts the Turkish economy to grow by 3 percent in 2016, 3.2 percent next year, and 3.5 percent the year after that.

Inflation is expected to be 7.9 percent, 7.7 percent and 7.5 percent in 2016, 2017 and 2018, respectively.