Fitch Ratings revised upward its 2025 world growth forecasts to 2.4% from 2.2% in June, citing stronger 2Q data in China and the eurozone, according to its global economic output report (pdf). However, the agency warned that global activity is still set to slow sharply from 2.9% in 2024, with evidence of a US deceleration now emerging in hard data.

China’s growth projection was raised to 4.7% from 4.2%, helped by a weaker exchange rate, falling export prices, and fiscal easing that has cushioned exports from the US tariff shock. However, Fitch warned that domestic demand is softening and deflation is “increasingly entrenched.”

The eurozone outlook was also upgraded to 1.1% from 0.8% after better-than-expected 1H trade data, though Fitch cautioned that much of the strength reflected front-running US tariffs. With consumer momentum fading, the bloc is unlikely to expand in 2H, though German fiscal support should add some cushion in 2026.

While the US’ growth forecast was lifted slightly to 1.6% from 1.5%, this is still below trend and significantly below the 2.8% growth rate recorded last year. Fitch flagged weaker consumption and hiring as tariffs, rising inflation, and tighter immigration squeeze growth. Consumer spending has already slowed, job growth has decelerated, and more inflationary pressure is likely to kick in soon. Fitch expects the Fed to respond with two more cuts this year and three in 2026.

Tariffs are set to weigh on near-term growth…: Fitch estimates the average US effective tariff rate at 16% — among the highest in the world. While pass-through CPI has so far been modest, inflationary effects are expected to intensify later this year, further weighing on household incomes. “Greater clarity about US tariff hikes does not alter the fact that they are huge and will reduce global growth,” said Brian Coulton, Fitch’s chief economist.

… and into 2026: The agency sees global growth slowing to 2.3% in 2026, well below trend. Long-term bond yields in the US, UK, Germany, and Japan remain under upward pressure, reflecting concerns about supply and fiscal sustainability, while the European Central Bank is unlikely to cut rates further, limiting chances of a near-term USD rebound.

MARKETS THIS MORNING-

Early morning trading is mixed in Asia-Pacific markets today, with Japan’s Nikkei hitting a fresh high on the back of tech investment group Softbank’s shares rising nearly 10% since markets opened. South Korea’s Kospi is also in the green, but Hong Kong’s HSI and mainland China’s CSI are both trading down. Meanwhile, Wall Street futures are trading mostly flat, after the S&P 500 hit another all-time high at market close yesterday, while the Dow Jones closed down.

TASI

10,498

-0.3% (YTD: -12.8%)

MSCI Tadawul 30

1,365

-0.1% (YTD: -9.6%)

NomuC

25,075

-0.5% (YTD: -20.3%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

34,670

+0.8% (YTD: +16.6%)

ADX

9,927

-0.3% (YTD: +5.4%)

DFM

5,923

-0.6% (YTD: +14.8%)

S&P 500

6,532

+0.3% (YTD: +11.1%)

FTSE 100

9,225

-0.2% (YTD: +12.9%)

Euro Stoxx 50

5,361

-0.1% (YTD: +9.5%)

Brent crude

USD 67.58

+0.1%

Natural gas (Nymex)

USD 3.03

-0.1%

Gold

USD 3,682

0.0%

BTC

USD 113,954

+2.1% (YTD: +21.8%)

Sukuk/bond market index

917.49

+0.12% (YTD: +1.7%)

S&P MENA Bond & Sukuk

149.77

-0.1% (YTD: +7.0%)

VIX (Volatility Index)

15.35

+2.1% (YTD: -11.5%)

THE CLOSING BELL: TADAWUL-

The TASI lost 0.3% yesterday on turnover of SAR 3.7 bn. The index fell 12.8% YTD.

In the green: Retal (+2.9%), Al Masane Al Kobra Mining (+2.6%) and Malath Ins. (+2.4%).

In the red: Obeikan Glass (-6.1%), Thimar (-4.7%) and Build Station (-3.7%).

THE CLOSING BELL: NOMU-

The NomuC closed 0.5% down yesterday on turnover of SAR 25 mn. The index declined 20.3% YTD.

In the green: Naas Petrol (+13.4%), Horizon Food (+9.0%) and Leaf (+6.9%).

In the red: Jana (-14.8%), Natural Gas Distribution Co. (-9.4%) and Dar Al Markabah (-8.8%).

CORPORATE ACTIONS-

Bupa Arabia for Cooperative Ins. received the go-ahead from the Ins. Authority for its restructuring into a holding company, it said in a Tadawul disclosure. The proposal involves demerging Bupa Arabia’s core ins. Business into a new, wholly-owned subsidiary, while the current listed entity would become the parent holding company. Bupa still needs shareholder approval and other regulatory procedures before it can finalize the move.

ADVISORS- Bupa tapped Lazard Saudi Arabia as its financial advisor and Zeyad Sameer Khoshaim Company (K&A) as legal advisor for the restructuring.

The board of Riyadh Cables Group greenlit a SAR 299.4 mn dividend distribution for 1H 2025 at SAR 2 per share, it said in disclosure to Tadawul yesterday. The distribution date is set for 14 October.

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