International credit ratings agency Standard and Poor's has announced the lowering of its forecast for US GDP growth for 2014 to 2.6 percent from the previous estimate of 3.1 percent, "amid the increased risks of a government stalemate and another round of the sequester next year".
According to the quarterly update on credit conditions in North America, the Asia-Pacific region and Europe, the ratings agency expects US GDP growth for 2013 to be closer to 1.7 percent, down from the previous forecast of two percent, as a result of the fiscal cliff deal, sequestration, and the October government shutdown.
S&P said that signs of broad improvement in Europe's economic conditions began to surface in the second quarter, primarily attributable to an easing in fiscal headwinds. Euro zone GDP is expected to contract 0.7 percent this year, followed by a mild recovery, with growth of 0.9 percent next year and 1.3 percent in 2015. The Asia-Pacific economic growth forecast remains at 5.5 percent this year, with that pace continuing into 2014.
