Global economic growth is expected to remain relatively stable in 2026, provided the recent surge in oil prices does not persist for an extended period, according to Fitch Ratings’ March 2026 Global Economic Outlook (GEO).
The ratings agency said the world economy has shown resilience despite geopolitical tensions and policy shifts in the United States.
The Global growth reached 2.7% in 2025, close to its long-term average, and is projected to slow only slightly to 2.6% in 2026, an upward revision from the 2.4% forecast in December.
Fitch noted that strong investment in artificial intelligence, large fiscal deficits in major economies, and strong consumer spending in the United States helped cushion the global economy against the effects of higher tariffs and geopolitical uncertainties last year.
United States growth is supported by fiscal spending
The United States economy is forecast to grow 2.2% in 2026, slightly higher than earlier projections and unchanged from the previous year.
According to Fitch, continued fiscal expansion will support economic activity, even as consumer spending begins to slow.
The agency expects household consumption to weaken somewhat as labour market conditions soften and income growth moderates. However, government spending and fiscal deficits are expected to continue providing a boost to economic activity.
A cooling labour market is also likely to influence monetary policy. Fitch expects the U.S. Federal Reserve to cut interest rates twice in 2026 as wage growth slows and hiring momentum weakens.
Mixed outlook across Europe and China
In the eurozone, economic growth is projected at 1.3%, broadly unchanged from earlier forecasts but slightly below the previous year’s performance.
Rising energy costs are expected to weigh on the region’s economy, though improving domestic demand and fiscal support in Germany may provide some relief.
China’s economy, meanwhile, is expected to slow to 4.3% growth in 2026, down from 5% in 2025.
Fitch attributes the slowdown to weaker consumer spending and cooling export growth, although the agency anticipates a mild recovery in business investment after last year’s contraction.
Oil price risks remain significant.
Fitch has raised its forecast for the average Brent crude oil price in 2026 to $70 per barrel, up from a previous estimate of $63. The projection assumes the Strait of Hormuz remains disrupted for about a month before prices gradually decline to the mid-$60 range later in the year.
However, the agency warned that a more severe scenario, where oil prices rise to $100 per barrel and remain elevated, could significantly disrupt the global economy. Under such conditions, world GDP could decline by 0.4% within a year, while inflation in the United States and Europe could increase by 1.2 to 1.5 percentage points.
Despite these risks, Fitch said global trade showed resilience in 2025, partly driven by strong demand for technology-related imports linked to the rapid expansion of artificial intelligence and semiconductor industries.
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