Global credit ratings agency Fitch Ratings has revised its 2026 world growth forecast downward by 0.2 percentage points to 2.4%, citing the cascading effects of an oil price shock that is squeezing household incomes, dampening consumption, and raising costs for businesses.

According to a report by myjoyonline.com, the forecast cuts have been broad-based, with the United States and the eurozone among the hardest hit. Fitch trimmed its US growth projection by 0.3 percentage points to 1.9%, while the eurozone saw a sharper cut of 0.4 percentage points, bringing its forecast down to just 0.9%.

Emerging markets outside China have also not been spared, with their collective growth outlook reduced by 0.2 percentage points to 3.2%.

However, not all the news is gloomy. China bucked the downward trend, with Fitch actually raising its forecast for the world's second-largest economy by 0.3 percentage points to 4.6%, following stronger-than-expected first-quarter data and remarkable resilience in its export sector. South Korea also received an upgrade, with Fitch citing the country's strong export prospects amid a global technology spending boom.

FULL TEXT: Here's what Fitch Ratings said about Ghana's economic outlook

A key factor softening the blow of the oil shock has been surging investment in artificial intelligence and related IT infrastructure, which has provided meaningful support to world trade and Asian export markets in particular.

Fitch Chief Economist Brian Coulton put it plainly: "The oil price shock is hitting world growth prospects and increasing downside risks. But we are also amid a very pronounced boom in global spending on IT, and that is cushioning the impact on activity in the near term, particularly in Asia."

Coulton also flagged the prolonged closure of the Strait of Hormuz as a significant concern, noting that the blockage has now stretched to 14 weeks, with the firm not expecting it to begin reopening until July.

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