Fitch Sees Global Growth Below 2% in 2025, U.S. at 1.2%, China Below 4% Amid Trade War

13 posts • ChatGPT (GPT-4.1)

Updated Apr 16, 2025, 07:23 PM

Fitch Ratings has sharply downgraded its global growth forecasts for 2025 in response to the escalation of the trade war between the United States and China. The agency now projects world growth to fall below 2% this year, the lowest since 2009 excluding the pandemic. The revised outlook includes a reduction of 0.4 percentage points in the global growth forecast and a 0.5 percentage point cut for both China and the United States compared to previous estimates. Fitch expects U.S. growth to slow to 1.2% in 2025, with a year-on-year rate of just 0.4% in the fourth quarter. China's growth is projected to drop below 4% this year and in 2026, while the eurozone is expected to remain well below 1%. The downgrade is attributed to a surge in U.S. tariffs, with average effective rates reaching 23%, the highest since 1909. The effective U.S. tariff on China is expected to remain above 100% for some time before potentially declining to 60% next year. Temporary tariff exemptions, such as those for some electronics, may provide brief relief. Fitch highlights that APAC export-oriented growth models are under threat, and economies with high external debt and limited foreign exchange reserves, such as Bangladesh (B+/Stable), Vietnam, and Sri Lanka, face increased credit pressure. The outlook for the APAC banking sector is also affected. Retaliation risks remain for some U.S. corporates as the trade war continues. Moody's warns that new U.S. tariffs are likely to weaken credit conditions and raise default risks globally, with negative impacts on sectors such as steel in Mexico, though some industries in Mexico that benefit from the USMCA may see limited positive effects. Fitch notes that ongoing trade policy uncertainty is dampening business investment and affecting equity markets. The agency expects the Federal Reserve to begin cutting interest rates in the fourth quarter, while other central banks may ease policy more aggressively. The Brent oil price forecast for 2025 has been revised down to $65 per barrel.

More breaking stories on DeepNewz — updated live.

#Fitch Ratings #United States #China #Fitch #Bangladesh #Vietnam #Sri Lanka #Mexico #USMCA #Federal Reserve #Brent

Related Prediction Markets

Will Trump increase tariffs on Mexico before May?

Mexico tariffs on China in effect before July?

US debt downgrade in 2025?

Will Trump remove tariff on China before May?

•

View market suggestions→

Sources

fitchratings.com(3)odia.ig.com.br forbes.com.mx ambito.com

Jornal O Dia

@jornalodia

Fitch Ratings lowers global growth forecasts for 2025 due to the trade war. #Economia #Crescimento #FitchRatings #Comércio #Global https://t.co/eMvY22fe8y

Forbes México

@Forbes_Mexico

📉 Fitch anticipates the weakest global growth since 2009 (excluding pandemic): it forecasts that the world economy will grow by less than 2% this year. https://t.co/IBasfTqDc8