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The global economic outlook is dimming amid the impact of escalating trade tensions, says Fitch Ratings, which sees stronger economic growth for Canada in 2019 but has lowered its forecast for 2020.

In a new report, the rating agency has revised its GDP growth forecast for Canada in 2019 up to 1.5% from 1.3%, following a strong second quarter.

Yet, it has trimmed its 2020 forecast to 1.6% GDP growth in Canada from its previous estimate of 1.7% due to the impact of ongoing global trade tensions.

“The spill-over from U.S.-China trade uncertainties and weaker global growth prospects are a stronger underlying current that we expect to carry into 2020,” it says, noting that the U.S. Congress still hasn’t ratified the U.S.-Mexico-Canada trade agreement, “which is adding to uncertainty and dampening business sentiment.”

Fitch says that rising employment and wages are supporting household incomes in Canada, but that high household debt levels and overvalued housing markets “continue to constrain household consumption and investment growth.”

The shifting outlook for Canada comes against the backdrop of widespread downward revisions in Fitch’s global forecasts, due to the escalating trade war, which it says, “has severely damaged the outlook for world trade and business investment.”

“There can be few precedents since the 1930s of global economic prospects being affected so significantly by trade policy disruptions,” it notes.

As a result, Fitch has revised its global GDP growth forecasts down by 0.2 percentage points for both 2019 and 2020.

Global GDP growth is now expected to come in at 2.6% in 2019 and 2.5% in 2020, down from 3.2% in 2018.

“The synchronised nature of the global downturn is striking – the decline in growth in 2019 is evenly split across our developed markets and [emerging markets],” it says.

Fitch has lowered its forecasts for 2019 in 12 countries, and has reduced its 2020 forecasts in 16 countries.