| Investors face rapid change due to inflation, geopolitical uncertainty, AI and the energy transition | IMF forecasts global growth of 3% in 2025, but warns of persistent downside risks | Agility, diversification and long-term structural alignment are vital to manage risk and capture growth |
Adapting to transformation – investing through global change
As we enter the final quarter of what has been an eventful year so far, investors have had much to navigate. From sharp US policy shifts, geopolitical instability, global trade realignments and a changing labour market, to the energy transition, elevated uncertainty and the prevalence of mega forces such as artificial intelligence. The investing landscape continues to evolve rapidly. What matters now is recognising the defining features shaping this environment as it transforms.
Inflation expectations are no longer anchored at 2% targets, fiscal discipline is under pressure and long-term growth trajectories are shifting. Against this backdrop, markets are reacting more quickly to short-term data, as investors look to interpret what it signals for both near-term performance and longer-term outcomes.
Key policy priorities
The International Monetary Fund’s (IMF’s) latest World Economic Update projects global growth expectations of 3% this year, rising slightly to 3.1% in 2026 – an upgrade on earlier forecasts. The revision reflects front-loading ahead of tariff changes, lower effective tariff rates, improved financial conditions, and fiscal expansion in key economies. While global inflation is expected to ease, it is anticipated to remain above target in some key countries like the US and on home shores. The IMF deduce, ‘Downside risks from potentially higher tariffs, elevated uncertainty, and geopolitical tensions persist. Restoring confidence, predictability and sustainability remains a key policy priority.’
Inflection point
During the World Economic Forum’s Annual Meeting at the start of the year, President and CEO Børge Brende said, “we are at an inflection point,” adding that the forum was taking place during “one of the most uncertain geopolitical and geoeconomic moments in generations.”
Fast forward to their August review and the Forum highlighted how a number of key issues are set to shape the global outlook over the coming months. These include renewed collaboration to tackle conflict and misinformation, large-scale reskilling to meet job transformation, redesigning financial systems for longer lifespans, greater investment in sustainable infrastructure and the energy transition, and accelerating gender parity and digital inclusion.
Together, these areas underline both the challenges and opportunities of this moment – and why, for investors, staying agile, globally diversified and aligned with long-term structural shifts, will be key to capturing growth while managing risk in line with their personal tolerances.
Embracing change
The key is not just to acknowledge this transformation but to see the opportunities it creates. Understanding how these forces interact can help position portfolios to capture growth while protecting against volatility in a changing world. The good news? You’ve got us to help you traverse and capitalise on these driving forces shaping our world.
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