The agency said in a report released today: “Governments may be forced to provide financial support packages to protect households and businesses from rising energy costs, which could increase budget deficits and public debt levels.”.
She noted that rising oil and gas prices would be the main channel for the effects of the conflict to spread to advanced economies, by fueling inflation, reducing household purchasing power and weakening domestic demand.
The brink of recession
The agency estimates that if oil prices remain high throughout 2026, it could slow the growth of advanced economies and possibly push some countries to the brink of recession.
Fitch noted that inflation risks appear more acute in countries such as Italy, the United Kingdom, Japan and France, while the impact of slowing growth may be greater in South Korea, Japan, Britain and Italy, as a result of declining household consumption coupled with rising energy and transportation costs.
