Fitch Ratings Raises Economic Outlook Amidst AI Boom
Fitch Ratings has significantly upgraded its projections for both global and U.S. Gross Domestic Product (GDP) growth. The agency points to a robust surge in information technology (IT) investments and the positive wealth effects stemming from a booming stock market as key factors cushioning the economy.
These developments are effectively mitigating the adverse impacts of elevated tariffs, suggesting a more optimistic short-term economic landscape than previously anticipated. The latest assessment comes from Fitch’s quarterly global outlook report released on Wednesday.
According to the report, the upward revision highlights the growing influence of technological advancements, particularly in artificial intelligence, on broader economic performance. This is a welcome development for policymakers and businesses navigating a complex global economic environment. This analysis is based on information disclosed by Fitch Ratings.
Global Economic Growth Forecast Revised Upward
Fitch now anticipates global economic growth to decelerate to 2.5% this year and 1.9% in 2026, a slight downward revision from the 2.9% growth observed in 2024. Despite this overall slowdown, the agency’s revised outlook reflects a stronger-than-expected performance in key economies.
U.S. GDP Projections See Notable Increase
For the United States, Fitch has revised its GDP growth forecast to 1.8% for the current year and 1.9% for the next. These figures represent upward revisions of 0.2 and 0.3 percentage points, respectively, compared to the September report, signaling increased confidence in the U.S. economic trajectory.
The agency has also substantially increased its private investment forecasts for the U.S. since September. Capital expenditures in IT have been a major driver, accounting for nearly 90% of the country’s GDP growth in the first half of 2025. However, this surge in IT spending has also led to a corresponding increase in IT imports.
AI Revolution Fuels Private Sector Spending
The widespread adoption and development of artificial intelligence appear to be a significant catalyst for this investment surge. Fitch estimates that the current stock market boom, heavily influenced by AI-related companies, could be adding as much as 0.4 percentage points to consumer spending.
Brian Coulton, Fitch’s Chief Economist, commented, “The AI revolution has spurred additional private sector spending on a scale that is strongly cushioning the adverse impact of tariff increases. The robots have come to the rescue.” This sentiment underscores the transformative power of AI in the current economic climate.
Outlook for U.S. State and Local Governments Remains Stable
In a separate analysis, Fitch assigned a “Neutral” sector outlook for U.S. state and local governments for the upcoming year. The vast majority of rating outlooks for these entities are expected to remain “Stable.” This suggests a degree of financial resilience at the sub-national level.
Credit quality is expected to remain consistently strong, with governments managing slower growth through robust reserves and prudent budgeting. However, the report also cautions about emerging risks, including a cooling labor market, tariff-induced inflation, and potential shifts in federal responsibilities.
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