The international rating agency Fitch has downgraded its forecast for global economic growth in 2025 to 2.3% from the 2.6% expected in December, Interfax-Ukraine reports.
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In 2026, global GDP growth could reach 2.2%.
The US economy will grow by 1.7% this year, compared to the previously expected 2.1%, and by 1.5% in 2026, instead of the 1.7% previously expected, analysts predict.
“The new US government has started a global trade war that will slow growth in both the global and US economies, fuel inflation in the US and slow the pace of the Fed’s interest rate cuts,” the press release notes.
Analysts say fiscal easing in China and Germany will help cushion the impact of higher U.S. tariffs, but eurozone growth this year will still be much weaker than forecast in December. Mexico and Canada will face technical recessions because of their close trade ties with the United States.
Fitch estimates that the current US import tariff rate (ETR) has already increased to 8.5% from 2.3% in 2024. Experts predict that the import rate from Europe, Canada, Mexico and other countries will increase to 15% this year, and for China it will be 35%.
As a result, the overall ETR will rise to 18% this year before falling to 16% next year, a 90-year high.
“The rise in tariffs will lead to higher consumer prices in the US, lower wages in real terms and higher business costs, while increased uncertainty will negatively affect business sentiment,” the agency's analysts believe.
According to their model, raising tariffs would slow growth in the US, China and Europe by about 1 percentage point by 2026 and accelerate US inflation by 1 percentage point.
In this regard, Fitch forecasts that the Fed will delay the next rate cut until the fourth quarter of 2025. In 2026, the Fed may cut the rate three times due to weakening economic growth.
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