📈 Global Growth Forecast Edges Up: IT Investment Cushions US Economy (Fitch)

• Fitch Ratings has slightly raised its world growth forecast for 2025, now expecting global GDP to slow from 2.9% (2024) to 2.5% (2025) and 2.4% (2026). • USA: GDP forecasts were revised up (+0.2pp to 1.8% in 2025) largely due to booming IT capital spending. IT investment accounted for almost 90% of US GDP growth in H1 2025, and AI-related wealth effects are offsetting the drag from the high 13.6% effective tariff rate. • China: 2025 GDP forecast lifted to 4.8%, but expected to slow to 4.1% in 2026. This comes amid falling fixed-asset investment (40% of GDP) and entrenched deflation. • Eurozone: Forecasts revised up to 1.4% (2025) and 1.3% (2026), bolstered by improving credit dynamics and expected German fiscal easing. • Monetary Policy Outlook: The US Federal Reserve is expected to keep rates steady in December 2025, followed by three rate cuts by June 2026. The Bank of England is also expected to cut three times in 2026. • Public Debt Support: Combined government borrowing by the US and China is projected to equal about US$ 4 Tn (4% of global GDP) this year and next, providing large-scale support to aggregate demand.