Fitch: If the oil price shock is temporary, global economic growth will remain stable

Investing.com – Fitch Ratings states that if the current oil price shocks are short-lived, global economic growth is expected to remain steady.

The rating agency forecasts that U.S. consumption will slow down by 2026 as a result of a weakening labor market putting pressure on household incomes. Fitch indicates that a cooling labor market combined with slower wage growth could lead the Federal Reserve to cut interest rates twice in 2026.

In the Eurozone, high energy prices pose a new challenge to economic prospects. However, as Germany begins to recover supported by fiscal easing measures, signs of an improving growth trend are emerging.

Germany’s economy has struggled in recent quarters, but with increased government spending to stimulate growth, it is starting to benefit from more accommodative fiscal policies. This progress is bringing more positive prospects for the broader Eurozone economy, despite resistance from rising energy costs.

Fitch’s outlook suggests that although economies in different regions face various challenges, global growth can remain resilient if short-term energy market volatility subsides.

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