Fitch Ratings announced on Thursday that an adverse scenario in which the Iran war continues through the first half of 2026 could leave global real GDP "about 0.8% lower after four quarters" compared to its March Global Economic Outlook (GEO), AzerNEWS reports.
The agency said "higher oil prices and declining equity markets" would drive the downturn, with the United States, Japan, and Korea among the hardest hit. In its baseline, Fitch projected global growth at 2.6%, with the United States at 2.2%, China at 4.3%, and the Eurozone at 1.3%. Under the adverse scenario, US growth could slow to 1.5%, China would fall below 4%, and the Eurozone under 1%.
Fitch added the impact would intensify over time, with US growth at "just 0.6%" year-on-year after four quarters, while Eurozone growth would also drop to 0.6%. It also warned inflation would rise by 1.3 percentage points (pp) after four quarters, but said monetary policy in major economies is unlikely to tighten significantly.
