(1 July 2025 – Global) Despite the recent cease fire in US-China trade tensions, the global economy still faces a steep slowdown in response to the most severe trade war since the 1930s, Fitch reports.
Fitch forecasts world GDP growth at 2.2 percent in 2025, an upward revision of 0.3 percentage points since the April Global Economic Outlook (GEO). Fitch has raised its forecasts for growth in 2026 to 2.2 percent from two percent. These rates remain well below the 2.9 percent recorded in 2024 and the long term average of 2.7 percent.
“The tariffs have reduced US business and consumer confidence and prompted a spike in US imports in 1Q25 as US residents sought to front-run tariff increases. Inventories also rose sharply. There is little evidence of any impact on the US CPI so far, but upstream producer price and survey measures of price pressures have risen. There have been downward pressures on US financial asset prices as reflected in equity market volatility, a weakening dollar and higher long-term 30-year government bond yields” commented Fitch Chief Economist, Sovereign and Supranational Group, Brian Coulton.