Fitch published its September Global Economic Outlook Report under the title “The Federal Reserve’s (Fed) Easing Cycle Begins.”
The report indicated that the global economy is expected to grow by 2.7% this year, in line with historical trends.
This figure is noted to be 0.1 percentage points higher than previously projected in June, with upward revisions to growth forecasts for the United States, the United Kingdom, Brazil, and Russia.
The report highlighted that due to a slowdown in U.S. growth, global economic growth is expected to decline to 2.5% in 2025 and 2.4% in 2026. It stated, “The Fed’s easing cycle is finally about to start, but interest rates will remain restrictive next year, and the impact of rate cuts on growth will be minimal.”
It was also mentioned that China’s growth is expected to slow next year due to a loss of momentum in exports, while growth in the Eurozone is forecasted to recover next year.
“THE FED’S EASING CYCLE WILL BE MODERATE COMPARED TO PREVIOUS PERIODS”
The report stated that the growth forecast for the U.S. economy has been raised from 2.1% to 2.5% for this year, and it is expected to grow by 1.6% in 2025 and 2026.
It emphasized that service inflation in the U.S. remains very high, which is inconsistent with a sustainable return to the target. The report pointed out that the Fed’s monetary policy easing cycle will be moderate and slow compared to previous rate-cutting periods.
The report projected that China’s growth will be 4.8% this year and 4.5% next year, while the Eurozone is expected to grow by 0.8% this year and 1.5% in 2025.
The report noted an increasing unemployment rate in the U.S. and some other advanced economies, indicating that this reflects an increase in labor supply rather than a decrease in labor demand.
It highlighted that recent data have boosted the Fed’s confidence that inflation is on a downward path, stating, “We expect 25 basis point rate cuts in the September and December meetings, 125 basis points in 2025, and 75 basis points in 2026.”
NO CHANGE IN FORECAST FOR TURKEY
The report noted that annual inflation in Turkey significantly slowed in August, with expectations for the year-end inflation to be around 43%.
It stated that the Turkish economy is expected to grow by 3.5% this year, 2.8% in 2025, and 3.7% in 2026.
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
