International rating agency Fitch Ratings still expects global GDP to fall by 4.6% in 2020.

“The stabilization in the forecast follows clearer evidence in recent weeks of sequential improvements in economic activity,” the agency said in the Global Economic Outlook (GEO) for June.

“Nevertheless, the risk of a resurgence of the virus and renewed nationwide lockdowns - which could severely interrupt the expected economic recovery path - remains high,” said Brian Coulton, Chief Economist, Fitch Ratings.

The report indicates that firmer signs of economic recovery have emerged in the form of sharp month-on-month increases in retail sales in the U.S., UK and Spain in May, a rise in US employment last month and improving PMI balances in May and June. Daily mobility data confirm a significant ongoing recovery in visits to retail and recreation venues. Construction activity is also reviving.

China’s recovery also continued at a solid pace in May and Fitch Ratings has raised its 2020 GDP forecast to 1.2% from 0.7% in the previous GEO, the first upwards forecast revision for a long time.

Fitch Ratings now expects Germany’s economy to shrink by 6.3% in 2020 compared to an earlier forecast of -6.7%, owing to additional fiscal policy easing.

The eurozone forecast is, correspondingly, now -8% compared to -8.2% in the previous GEO.

Fitch has affirmed the U.S. 2020 GDP forecast at -5.6% following recent improvements in the data but still expects the economy to decline by 9.9% in 2Q20 and the recent increase in daily new virus cases increases downside risks.

Fitch has lowered the forecasts for Brazil, the UK, Mexico, Russia, Turkey, South Africa and Indonesia.

Fitch expects global GDP to rise by 4.9% in 2021, a rebound that is partly technical as the restrictions on activity imposed in 2020 are eased.