International credit rating agency Fitch Ratings expects global economy to grow by 5.7% in 2021, according to its Global Economic Outlook report for December, published on Tuesday.
The figure is down from the agency’s 6% world GDP growth forecast made in September.
Despite the downgrade, Fitch said the forecast would still represent the strongest growth since 1973.
The downward revisions were driven by supply chain disruptions that are limiting growth potential and helping fuel inflation.
The demand has rebounded strongly, but the output has lagged, Fitch said, adding that supply bottlenecks resulted in real GDP expanding by less than expected in third quarter of 2021, with prices increasing by more than anticipated.
The rating agency stated the prices are expected to stabilize in 2022 “as spending switches back to services, strong investment boosts goods supply, and fiscal stimulus unwinds”.
Fitch also cut its forecast for 2022 world GDP growth from 4.4% to 4.2%.