The global economy is growing, but has yet to return to the rates of growth that it experienced before the financial crisis, according to a report released Tuesday by Moody’s Investors Service.
The world’s economies are still growing, the report from credit rating agency says, but current, and prospective, growth rates are generally lower than they were before the crisis.
“The main drivers of growth in recent years — expansionary monetary policy in developed markets, export-led growth in Asia and a commodity super-cycle — have changed course. This has created a more volatile global economic environment and a slowdown in global growth which hasn’t fully recovered since the financial crisis,” Moody’s says in a statement announcing the report.
Of the six regions that Moody’s assesses, the decline in growth is most pronounced in Eastern Europe and Central Asia. The rating agency estimates that median growth in these regions will come in at 2.6% for the period from 2013 to 2016, compared to average growth of 6.5% from 2005 to 2008.
At the same time, Moody’s also notes that sovereign deficit levels continue to widen, pushing debt levels higher. “Commodity-exporting sovereigns face deteriorating fiscal and external balances, and in some cases their twin surpluses will shift to twin deficits,” says Gabriel Torres, vice president and senior credit officer at Moody’s.