Fitch Ratings increases global GDP growth outlook but US slowdown evident

New Delhi [India], September 10 (ANI): Fitch Ratings has revised its global GDP growth forecast moderately upward to 2.4 per cent for 2025, an increase of 0.2 percentage points from the June outlook.

However, the agency warned that the world economy will still face a slowdown compared to 2.9 per cent growth recorded last year, with the United States showing clear signs of weakness.

It stated "Global growth is now forecast to be 2.4 per cent in 2025, up 0.2pp since June...... US Slowdown Now Evident in 'Hard' Data"

The report expects the US economy to grow at an annual average of just 1.6 per cent, well below trend, even though a widening fiscal deficit may provide some support in 2026.

The latest Global Economic Outlook report noted that global growth remains below trend and that the slowdown is significant. While better-than-expected data in the second quarter of 2025 has supported an upward revision.

The report highlighted that the US economy is now showing a slowdown in "hard" data. Consumer spending has already slowed in 2025, mainly due to higher inflation that has reduced real wage growth.

It mentioned that the job growth has also decelerated sharply, partly because of tighter immigration policies that have restricted labour force expansion.

The report said that the impact of the sharp rise in the US effective tariff rate (ETR) on inflation has been modest so far, but the pass-through to consumer prices is expected to increase later this year. Higher inflation is likely to add further pressure on household spending.

Highlighting the other major economies, the report stated that China's growth forecast has been revised upward to 4.7 per cent from 4.2 per cent, reflecting better performance than previously estimated.

Similarly, the eurozone growth forecast was raised to 1.1 per cent from 0.8 per cent, although Fitch cautioned that some of the recent positive surprises there were linked to businesses front-running purchases ahead of US tariff hikes.

Looking ahead, the report has also edged up its global growth forecast for 2026 by 0.1 percentage points to 2.3 per cent.

While this suggests a marginal improvement, the agency emphasized that the world economy will remain under pressure from trade tensions, high inflation, and slowing momentum in the US. (ANI)

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