Global credit is on track for moderate growth in 2015, and as a result macro risks may be easing, according to a new report from Fitch Ratings.
Global credit is expected to grow by 4.6% this year, the Fitch Report says. This represents a modest pickup from 2014, when credit grew by 4.4%, “reflecting the credit recovery in developed economies that was balanced by the slowdown in emerging markets.”
For 2015, developed markets are seeing credit grow by just 2.6%, whereas the Middle East and Africa continue to lead global credit growth with an 8.1% increase, the Fitch Report says. Asia and Latin America are also forecast to recover.
Although certain countries have seen credit pick up in 2015, most do not show signs of asset price bubbles, the Fitch Report says. As a result, the credit rating agency’s indicators of macro-prudential risk “could continue to trend lower with the highest risks still largely confined to emerging markets (EMs).”
In addition, the Fitch report notes that lower global growth trends, weaker commodity prices, and tighter lending conditions, are likely to weigh on credit growth in emerging markets.