The global financial landscape in 2025 is increasingly defined by economic fragmentation and the persistent challenge of sticky inflation, necessitating a careful and active approach to risk management. The overall global growth is projected to continue its slowdown, moving from 3.3% in 2024 to an estimated 3.2% in 2025, driven largely by muted growth in advanced economies while emerging markets maintain a more resilient, albeit slower, pace above 4%. A key structural shift is the weakening of long-term macroeconomic anchors, such as firmly anchored inflation expectations, due to geopolitical fragmentation, evolving trade dynamics, and significant policy divergence among major economic powers. In this environment, policymakers face the urgent task of restoring confidence and stability by rebuilding fiscal buffers, particularly as high government debt and elevated interest rates make sovereigns vulnerable to borrowing cost spikes and financial market corrections. Investors are increasingly gravitating toward mega forces like the AI theme as durable return drivers, requiring granular analysis across asset classes to find alpha in a volatile market where traditional asset allocation strategies may be less effective.
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