Global Economic Conditions Worsen

In a recent announcement, Fitch Ratings highlighted the deteriorating global economic landscape, prompting a significant revision in its forecasts for interest rate cuts by the European Central Bank (ECB) and emerging market central banks.

Impact of Escalating Trade Wars

The adjustment comes as escalating trade tensions, particularly between the US and China, have led to sharp tariff increases. Fitch notes that these developments have pushed US effective tariff rates to their highest levels since 1909, further straining global economic growth.

Revised Growth Forecasts

As a result of these challenges, Fitch has revised its 2025 world growth forecast downward by 0.4%, marking the lowest growth rate since 2009, excluding the pandemic period. The firm now anticipates more aggressive monetary policy responses, including deeper rate cuts, to mitigate the economic slowdown.