Fitch Ratings predicts "coinciding recessions" in the US and the eurozone next year, which, if it happens, would be only the fourth time since 1980, the rating agency said yesterday in a note.

According to the agency quoted by Lusa, these recessions will delay growth prospects in other regions, especially in emerging economies that depend on demand from developed countries.

In the US, Fitch's global macroeconomic forecasts for 2023 point to "a mild recession" as the Federal Reserve implements measures "to address higher inflation", and "job growth and consumer demand deteriorate in response".

Even so, Fitch believes that "the recession is modest by historical standards", with households "not over-indebted" and admitting that rates will reach "a peak close to 5%".

On the other hand, "the eurozone recession will start earlier - in 2022 - and will be more severe than in the US, since the natural gas crisis has led to considerable volatility in energy prices," he warned.

According to Fitch, confidence indicators "suggest that households and companies are prepared for a shock and have reduced spending", stressing that "these conditions will not improve in the short term, and a period of adjustments to energy supply and demand changes is coming".

The agency also said that "the recovery in Chinese growth will be modest, while the economic outlook continues to be overshadowed by the uncertain duration of the country's zero covid policy and persistent difficulties in the real estate sector".

Fitch believes that inflation will be slightly lower in 2023, but warned that there is a current "momentum" in prices that could prevent inflation from falling towards the objectives of the central banks, which, according to the agency, are unlikely to cut interest rates next year.

Thus, Fitch warned, this scenario for 2023 will be accompanied by higher sovereign debt costs.

"Financing costs are rising," he said, pointing out that the benchmark in these cases, i.e. 10-year US Treasury bonds, has also seen increases, accompanied by rising interest rates to combat inflation.