In its Global Economic Outlook – December 2025, Fitch Ratings has upwardly revised its projection for global economic growth in 2025 and 2026. The ratings agency noted several positive developments for the global economy, which led to an upgrade of its outlook. Still, some areas of weakness must be closely monitored and could impact overall global growth. In a separate report, Fitch also has a more optimistic outlook for the global housing market.

• Fitch projects the global economy to expand by 2.5% this year and 2.4% in 2026. Both are up from their September forecast. Despite the higher projection, it would mark a slowdown from the 2.9% growth in 2024, according to Fitch.
• The ratings agency believes that substantial investment in artificial intelligence (AI) technology will contribute to global economic growth this year and next. Furthermore, consumer spending has been relatively robust as higher equity markets have driven consumers to feel wealthier.
• There are risks to the outlook, including bubble risks brought on by AI investing, high government debt and slower economic activity in China.
• Looking at the global real estate market, Fitch expects home prices to increase at a relatively modest pace in 2026. Ongoing supply shortages may continue to help push prices higher. However, Fitch did note that mortgage risks linger.
• Here in Canada, Royal LePage projected home prices to rise by 1% year-over-year in the fourth quarter of 2026, driven by a rise in demand.

All signs point to a global economy that is proving its resiliency despite extensive tariffs from the US. Several recent outlooks from notable organizations have revised their projections for global growth upward, but expect slower growth compared to 2024. In Canada, the economy is expected to expand, potentially with the help of a stronger real estate market that struggled to gain traction in 2025.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.