Fitch Ratings warned that the oil crisis triggered by the US-Iran conflict is weighing on the global economic outlook. In response to rising energy costs and inflationary pressures caused by persistent supply disruptions, Fitch lowered its 2026 global economic growth forecast by 0.2 ppts to 2.4%.

Fitch raised its forecast for the average price of Brent oil this year to USD87 per barrel from the previous USD70 per barrel, reflecting a prolonged closure of the Strait of Hormuz. Although a ceasefire agreement has been reached between the United States and Iran, negotiations remain highly challenging, and reopening before July appears unlikely. Under an adverse scenario in which the average oil price reaches USD100 per barrel this year, equity markets could fall 10% and credit conditions could tighten. This would imply that US economic growth could slow to 0.8% over the next 12 months, eurozone growth to 0.3%, and China’s growth to 3.4%.

Related NewsImports YoY for May in China is 27.4%, higher than the previous value of 25.3%. The forecast was 25%.
Under its base case scenario, Fitch raised its China economic growth forecast by 0.3 ppts to 4.6%, supported by stronger-than-expected performance in 1Q26 and resilient exports.

However, Fitch lowered its growth forecasts for the United States and the eurozone by 0.3 ppts and 0.4 ppts to 1.9% and 0.9%, respectively.

Fitch currently expects the Federal Reserve and the Bank of England to keep interest rates unchanged this year before resuming rate cuts next year, while the European Central Bank may raise interest rates by 25 bps in June this year. (mn/u)

Related NewsInflation Rate YoY for May in China is 1.2%, unchanged from its last period. The forecast was 1.3%.

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