Fitch Downgrades Global Growth Forecast Amidst Escalating Trade Tensions

Fitch Ratings has reduced India's growth forecast for 2025-26 and 2026-27 to 6.4% and 6.3%, respectively. The global outlook for several economies has also been revised down due to heightened trade tensions. The US and China growth forecasts are lowered significantly, with global growth rates at a historic low.

Fitch Ratings has slashed its growth forecast for India by 10 basis points for the fiscal years 2025-26 and 20 basis points for 2026-27, projecting figures of 6.4% and 6.3%, respectively. This comes as the Reserve Bank of India also lowered its forecast amid rising trade tensions induced by US tariffs.

The ratings agency has made similar downward revisions for numerous economies, including France, the UK, and China, citing the intensified global trade war as a primary driver. Fitch has significantly cut its world growth predictions, reflecting 'Liberation Day' tariffs imposed by the US, which exceeded prior assumptions.

Fitch's Global Economic Outlook now anticipates world growth in 2025 to drop by 40 basis points, with China and the US each seeing a 50 basis point reduction. It's expected the Federal Reserve will postpone rate cuts until late 2025, despite the mounting pressure from a deteriorating economic landscape.

(With inputs from agencies.)