Fitch revises down GDP projections for 10 developed economies

Fitch Ratings announced Wednesday its lowered the medium-term GDP projections for the 10 developed economies over the next five years.

"Large adverse economic shocks in recent years from Covid-19 pandemic disruptions and the European (natural) gas crisis are expected to have a lasting negative impact on supply-side productive potential," it said in a statement.

"This will partly be reflected through slower capital accumulation, reducing capital deepening and labour productivity growth," it added.

Fitch Ratings Chief Economist Brian Coulton said the GDP in the biggest developed economies will not return to its pre-COVID-19 pandemic path, even in the medium term.

"We have cut our estimates of future potential GDP growth rates for the UK, Germany and Japan by 0.2pp to 1.2%, 1.1% and 0.5%, respectively. We have also lowered US potential growth by 0.1pp to 1.7%, partly reflecting slower capital deepening," said the statement.