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The GDP growth of emerging markets is set to fall from 4.4pc last year to just 4.2pc in 2016, before rising to 4.8pc in the following year. These economies have in recent years served as the engines of global growth.  Moody’s said weak oil commodity prices and falling demand for exports could also  drag on the world economy.  Growth forecasts for Argentina, Brazil, Mexico, and Turkey have been slashed. All are emerging market economies which have been at the sharp end of the commodities rout. It is thought that their weakness will have knock-on effects for the world’s advanced economies.

Despite the effective tax cut offered by low oil prices to importers of the commodity, the turmoil that engulfed financial markets at the beginning of the year will be enough to prompt a slowdown among advanced G20 markets this year, Moody’s believes. 

The rating agency expects the GDP of advanced major economies to rise by 1.7pc this year, compared with a 1.9pc increase in 2015. Elena Duggar, a Moody’s associate managing director, said advanced economies had failed to return to the growth rates enjoyed before the recession, as they have done historically following economic busts.  Ms Duggar said that the factors pulling down on global growth “may prove to be enduring, and global real GDP growth will remain low for some years”. She added that while “financial market volatility from earlier in the year has abated, it showed that the risks of weaker growth scenarios have become more tangible”.  “The global recovery has weakened further and prospects across countries remain uneven and generally weaker than over the past two decades. In addition, global trade remains subdued, while spillovers from emerging markets shocks to financial markets globally have increased substantially.” Moody’s anticipates that oil prices, currently just below $50 a barrel, will average $33 across 2016, before rising to an average of $39 in the following year. Alongside the commodity slump, the ratings agency warned that the possibility of higher US interest rates and the risk of a more severe slowdown in China could further darken the outlook.