Wednesday, 5 November 2025
Fitch Ratings has lowered its global credit outlook in its mid-year update for 2025, citing a deteriorating growth environment driven by higher tariffs, policy uncertainty in the United States, and heightened geopolitical risks.
The agency now forecasts global real GDP growth at 2.2 percent in 2025, a sharp slowdown from 2.9 percent in 2024. Fitch said weaker trade flows and reduced investment confidence are weighing on global activity, with advanced economies particularly exposed to the impact of U.S. tariff measures.
“Global growth momentum is fading, and the risks are increasingly tilted to the downside,” the agency noted in the update released on July 2. Fitch highlighted that while some emerging markets continue to post stronger growth, the overall slowdown is broad-based and likely to pressure credit markets in the coming months.
The revised outlook comes amid concerns over U.S. fiscal and trade policy direction, coupled with geopolitical tensions that are adding to financial market volatility. Fitch warned that the weaker economic backdrop could translate into tighter financing conditions for both sovereign and corporate borrowers.
Despite these challenges, Fitch emphasized that most banking systems remain resilient, with capital buffers stronger than in previous downturns. However, the agency cautioned that prolonged uncertainty and sluggish growth could erode credit quality if the current trends persist.
