Fitch Ratings predicts 2024 impact from soaring oil price

New Delhi, Nov 11: In a stark warning, Fitch Ratings predicts that higher-than-expected oil prices, stemming from potential disruptions in the Middle East’s oil supply due to conflicts, could significantly impact global economic growth and lead to a surge in inflation.
According to Fitch’s Global Economic Outlook (GEO), a scenario with average oil prices of USD 75 per barrel in 2024 and USD 70 per barrel in 2025 could be upended if oil prices spike to USD 120 per barrel in 2024 and USD 100 per barrel in 2025 due to supply restrictions.
The simulations, conducted using the Oxford Economics Global Economic Model, reveal a potential 0.4 percentage point (pp) reduction in world Gross domestic product (GDP) growth in 2024, with a lingering 0.1 pp lower growth in 2025.
Despite the modest rebound anticipated in 2025, Fitch suggests a persistent moderate impact beyond the initial shock.