Global Growth to Remain Steady if Oil Shock Is Short-Lived – Fitch
By Praisebell Rosemond Larbi
Global economic growth is expected to remain broadly stable in 2026 provided the current surge in oil prices does not persist for an extended period, according to the latest March 2026 Global Economic Outlook released by Fitch Ratings.
The international ratings agency noted that the world economy has remained resilient despite a series of geopolitical tensions and policy shifts in the United States.
According to Fitch, global economic growth reached 2.7 percent in 2025, close to its long-term average. The agency now projects that global output will expand by 2.6 percent in 2026, slightly lower but still relatively stable. This represents an upward revision from the 2.4 percent growth forecast made in the December edition of the outlook.
Fitch explained that several key factors helped support global growth last year, including strong investment related to artificial intelligence technologies, large fiscal spending in major economies, and robust consumer demand in the United States.
US Consumption Expected to Moderate
However, the agency expects economic activity in the United States to moderate somewhat this year as household spending slows.
Fitch forecasts US GDP growth at 2.2 percent in 2026, slightly higher than its earlier estimate of 2 percent and broadly unchanged from the country’s performance last year.
Despite expectations of slower consumer spending, fiscal policy is expected to continue supporting the economy as the government maintains a widening budget deficit.
Eurozone Outlook Remains Stable
In the Eurozone, economic growth is projected to remain relatively modest but stable.
Fitch expects the region’s economy to expand by 1.3 percent in 2026, unchanged from its previous forecast and slightly below last year’s growth level.
The ratings agency noted that rising energy prices could pose new challenges for the region’s recovery. However, underlying economic conditions are improving, particularly as Germany begins to recover with the support of fiscal stimulus measures.
When excluding the volatile performance of Ireland, the eurozone is expected to record a 0.3 percentage point improvement in growth, reaching about 1.3 percent.
China’s Growth to Slow
Meanwhile, China is projected to experience slower economic growth.
Fitch expects China’s economy to expand by 4.3 percent in 2026, down from 5 percent growth recorded in 2025, reflecting weaker consumer spending and slower export expansion.
Nonetheless, the agency anticipates a modest recovery in capital investment after 2025 recorded the first annual decline in investment since 1990.
Oil Price Risks Remain
Fitch also revised its oil price assumptions upward, forecasting that Brent crude oil will average around $70 per barrel in 2026, compared with its previous estimate of $63.
This projection assumes that disruptions around the Strait of Hormuz last for about a month before prices gradually decline to the mid-$60 range in the second half of the year.
However, the agency warned that a more severe scenario could significantly disrupt the global economy. If oil prices were to rise to $100 per barrel and remain at that level, it could trigger a major supply shock.
Under such a scenario, Fitch estimates that global GDP would decline by about 0.4 percent after four quarters, while inflation in both the United States and Europe could increase by between 1.2 and 1.5 percentage points.
Despite these risks, the ratings firm noted that global trade showed resilience in 2025, partly supported by strong investment in information technology and the growing global demand for semiconductors.
