Fitch flags flat global growth for 2026

November 20, 2025 (MLN): Fitch Ratings expects global GDP growth to remain broadly flat in 2026, while fiscal and political risks rise across major economies, the agency said in a press release on Wednesday.

The agency noted that uncertainty around US tariff policy has eased after a series of announcements and trade arrangements.

However, much of the economic impact is still pending, and Fitch expects further volatility next year, though within a narrower range than in 2025, due to legal battles, US-China competition and the scheduled review of the USMCA.

Fitch said global growth remains vulnerable to several downside risks.

These include a possible resurgence of trade tensions, a sharper slowdown in China, a reassessment of AI-related investment returns, overheating in the US economy and financial market shocks.

The press release highlighted deeper structural risks shaping the 2026 outlook.

These stem from shifts in global trade patterns, rapid technological changes, geopolitical realignments and evolving financial-market dynamics.

Fitch said these trends could materially affect sovereign credit conditions.

Fiscal pressures are expected to intensify. The agency warned that government debt will continue to rise, driven by large budget deficits in some of the world’s biggest economies, including the US and China.

Rising interest costs, weak GDP growth, structural expenditure burdens and difficult political environments are compounding the challenge of stabilizing public finances.

Fitch also underscored elevated political risks. The agency pointed to shifts in US foreign policy, US-China rivalry, ongoing military conflicts, election cycles, fiscal strains and rising public discontent over inequality, corruption and youth unemployment.

Despite these headwinds, sovereign rating outlooks remain broadly stable heading into 2026. Fitch lists 10 Positive Outlooks and nine Negative Outlooks.

The agency recorded eight net rating upgrades so far in 2025, seven of them in emerging markets. 

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