Global Economic Outlook - Oil Shock Drives Growth and Inflation Revisions

Ed Parker and Charles Seville outline Fitch’s updated Global Economic Outlook, covering how the impact of the US‑Iran war and resulting oil shock are driving growth and inflation forecast revisions, along with the impact of ongoing AI investment.

The ongoing US-Iran conflict has created a complex and mixed picture for Canada, a major oil exporter navigating both the benefits and costs of elevated energy prices. In this episode of Fixed Interests, Joshua Grundleger and Mark Sadeghian discuss Fitch's updated oil price forecasts and what the shock means for Canada's sovereign credit profile, energy sector, and provincial finances. The conversation examines diverging outcomes across the country, from Alberta's fiscal windfall to the headwinds facing Ontario and Quebec, and considers whether the Carney government's infrastructure and regulatory reforms could meaningfully shift Canada's long-term energy growth trajectory.

Hungary’s April elections delivered a decisive victory for the opposition Tisza party, reshaping the country’s political landscape and outlook for policy reform. In this episode of Fixed Interests, Erich Arispe Morales, Head of Eastern Europe Sovereigns, speaks with Malgorzata Krzywicka, Hungary’s primary analyst, about the election outcome and its implications for the country’s sovereign credit profile. The discussion places Hungary within the context of broader Central and Eastern Europe election cycles, examining how political change has influenced fiscal policy, EU relations, growth prospects, and rating trajectories across the region. Related resources:Caucasus Sovereigns Face Policy Challenges due to Effects of Iran WarHungary’s New Government Faces Macroeconomic, Fiscal Challenges 

AI‑driven investment in data centers, compute capacity, and supporting infrastructure continues apace, raising important questions about future monetization and credit sustainability. In this episode of Fixed Interests, Justin Patrie, Head of Credit Commentary and Research, is joined by Alen Lin, Senior Director in Corporate Ratings, and Alex Bumazhny, Group Credit Officer, to examine recent developments around AI’s credit implications. The episode looks at whether current data center and compute capex is supported by future revenue potential, how value and cash flows may evolve across the AI value chain, and where overinvestment and disruption risks may emergeRelated resources: AI-Related Risks Rising for Software, Media, and Services CorporatesAI Revenue Potential Could Support Current Investment ScaleUS Public Power Planning Key to Absorbing Data Center Load Growth 

Richard Hunter and Duncan Innes-Ker discuss how the Middle East crisis is affecting sovereign ratings and the macro-outlook. Impacts are contained so far, and much geopolitical risk is already built into ratings and headroom.Related Resources:Fitch Insights: Credit Implications of the Iran WarWorld Growth to Continue at Steady Pace if Oil Price Shock Short-LivedEgyptian Banks Are Well Positioned to Withstand Iran Conflict EffectsHigh Oil Prices Support PDP ABS Collateral Value; Hedges Limit Upside

From unsupported EV software to AI‑driven changes in office use and logistics, tech is reshaping collateral performance. Justin Patrie, Head of Fitch Ratings Credit Commentary and Research, and Suzanne Albers, Senior Director in Structured Finance, look at pressure points such as outdated EV systems, shifts in office demand linked to AI adoption, and the widening gap between legacy and modern logistics sites. Taken together, these trends are influencing risk across auto ABS, CMBS, and RMBS and accelerating how these sectors respond to the faster pace of technological change.Related Resources:Accelerating Technology May Increase Obsolescence Risk Within ABS, MBSStable Arrears Protect European Auto ABS Against Near-Term RiskU.S. CLO Note Ratings Resilient to Severe Software Sector Stress

Thomas Rookmaaker and Harry Hu evaluate recent youth‑led protests in several Asian countries, driven by concerns over governance, living costs and unemployment, and their implications for sovereign credit profiles and political transitions.Risk of Political Flare-Ups to Linger in 2026 for Some APAC SovereignsAsia ‘BBB’ Sovereigns Show Strong Growth; Fiscal Risks DivergeDurable Coalition Key to Thailand's Fiscal Outlook After Elections

Justin Patrie and Sarah Repucci unpack Fitch’s Global Credit Outlook, highlighting resilient credit conditions, pressures in China and Canada, and key risks, including strain on lower‑income U.S. consumers, tariff volatility and geopolitical shocks.Global Credit Resilience to Face Major Tests in 2026Global Private Credit’s Burgeoning Scale, Complexity to Continue in 2026Geopolitical Tensions Raise Emerging Market Credit Risks in 2026Benign U.S. Credit Backdrop Faces AI, Consumer and Trade RisksGeopolitical Tensions Cloud Developed Europe’s Growth, Investment

Todd Martinez and Josh Grundleger discuss the US ouster of Nicolas Maduro, the revived Monroe Doctrine, and key risks for Latin America, including oil investment, debt restructuring, regional market reactions, and impacts on migration and tourism.

Brian Coulton and Ed Parker discuss Fitch’s Global Economic Outlook, reviewing where the world economy stands at the close of 2025 and key trends for 2026, from AI-driven investment and resilient U.S. equities to China’s sharp investment slowdown.