Fitch Ratings Revises Global Growth Forecast Amid Oil Crisis

Fitch Ratings has revised its global growth forecast due to the ongoing oil crisis triggered by the conflict between the U.S. and Iran, according to Jin10. In its latest Global Economic Outlook report, Fitch has lowered the 2026 global growth projection by 0.2 percentage points to 2.4%. The rise in inflation is squeezing real wages, suppressing consumption, and increasing corporate input costs, leading to widespread downgrades in growth forecasts for several economies. However, stronger-than-expected IT investments related to artificial intelligence are providing a buffer for global economic activity, supporting world trade and Asian exports. The closure of the Strait of Hormuz has now lasted 14 weeks, and Fitch assumes it will begin reopening in July. The agency has raised its 2026 average Brent crude price forecast from $70 per barrel in March to $87 per barrel. While the oil shock presents a strong headwind to global growth, Fitch's baseline expectation is far less severe than the oil crisis of the 1970s. Fitch currently anticipates that the U.S. Federal Reserve and the Bank of England will keep interest rates unchanged this year, with rate cuts expected to resume in 2027. The European Central Bank is set to raise rates by 25 basis points in June, but Fitch forecasts this trend will reverse next year.