Fitch lowers global economic growth forecast to 5.7% for 2021

Fitch Ratings lowered its global gross domestic product (GDP) expectation for 2021 by 0.3 percentage points.

The rating agency expects the global economy to expand 5.7%, down from its previous estimate of 6%, made in its Global Economic Outlook in September.

The agency also lowered its global growth forecast for 2022 to 4.2%, from 4.4%.

Fitch cited rising inflation in a statement on Tuesday for the downward revisions.

"The sharp rise in global consumer goods prices since March primarily reflects a huge surge in goods demand, fueled by stimulus measures, particularly in the US," it said. "The scale and longevity of the global inflation shock has taken most forecasters and central banks by surprise and is bringing forward the start of global monetary policy normalization.”

The agency said it expects prices to stabilize in 2022 as rising investment boosts the supply of goods.

It, however, warned the risk of inflationary pressures is making central banks nervous.

"Inflation has become a public concern – now amplified by energy price shocks – and inflation expectations have increased," it noted.