S&P Global Ratings lowered its growth forecast for emerging markets (EMs) due to the economic effects of the ongoing Russia-Ukraine war, the credit rating agency said in its latest report. 

Amid rising energy prices, along with weakening trade and financing conditions, the agency lowered its real GDP growth forecast for EMs overall to 4% for this year and 4.3% in 2023, according to the report it released on Friday. 

The 2022 figure in its previous forecast had been 4.8% and, for next year, it had been 4.4%. 

"The six largest Latin-American economies are set to see growth this year of 1.7%, marking a downward revision from S&P Global Ratings' previous 2% forecast," it noted.

The agency projected consumer price inflation in the median EMs to be 1.2 percentage points higher in 2022, compared with its previous inflation forecast from November.

"And such rising inflationary pressures and financing costs may impede fiscal consolidation, strain governments' credit quality, and erode credit fundamentals," it underlined.

S&P Global Ratings Chief Emerging Markets Economist Satyam Panday said broadening inflationary pressure means "we now expect tighter monetary policy across most EMs despite the conflict weighing on economic activity, especially with the US Federal Reserve indicating a swifter policy tightening stance."

He said the war in Ukraine was the main reason for the downside risks in EMs, adding that concerns over faster Fed tightening and negative investor sentiment due to the war may trigger financial market volatility, leading to weaker exchange rates and significantly higher yields./aa