ISTANBUL

The world economy's post-pandemic recovery in 2021 has slowed sharply and will continue to do so this year and the next, according to global agency Fitch Ratings.

The agency said global fiscal recovery has been “affected by higher commodity prices, rising inflation … increased borrowing costs, slowing real GDP growth and the war in Ukraine.”

In the current circumstances, the median global fiscal position would return to its pre-pandemic level in 2029, according to a Fitch report.

“Policy interest rates are rising, and Fitch believes this marks an end to the era of very low government borrowing costs, which have primarily benefitted developed-market sovereigns,” it added.

The agency underlined that the fiscal positions of emerging markets are “more divergent than they were pre-pandemic.”

“This is due in part to the surge in commodity prices that is supporting government revenue and nominal GDP growth in commodity-exporting regions, including the Gulf Cooperation Council and Latin America,” the report said.