Macroeconomic and geopolitical analysis

Energy shocks in a more fragile world

The Iran conflict and disruptions in the Strait of Hormuz highlight a structural shift towards a more shock-prone global environment. So far, the economic impact remains contained, with moderate inflation and limited demand destruction. However, a prolonged supply disruption pushing oil prices above $150 per barrel could materially weigh on global growth, making energy the key near-term risk.

Emerging markets show relative resilience

Emerging economies are proving more robust than expected. Countries benefiting from the AI investment cycle or from commodity exports are cushioning the impact of the energy shock, while more vulnerable importers face greater pressure. Overall, this resilience supports global trade and provides a stabilising backdrop, particularly for open economies such as Europe.

AI as a powerful—yet debated—growth engine

Massive investments in artificial intelligence, especially in the US, are driving a broadening economic expansion across sectors such as infrastructure, construction and energy. While concerns of overinvestment echo past technology cycles, this pattern remains typical of major innovation waves. At this stage, AI appears to enhance productivity rather than replace jobs, although risks to the labour market—particularly for younger workers—are increasingly monitored.

Profit distribution and social dynamics

Strong corporate profitability—particularly in technology sectors—has renewed attention on how economic gains are distributed. However, the picture remains nuanced across regions and sectors. While there are signs that productivity gains are not always fully reflected in wage growth, labour market dynamics differ significantly, and in some cases workers still benefit indirectly through capital ownership. Rather than an immediate source of tension, this imbalance could gradually become more visible, especially if perceptions of fairness around value sharing continue to evolve.

Sovereign debt: a latent vulnerability

High levels of public debt continue to pose structural risks. Although bond markets remain relatively orderly, rising yields signal growing scrutiny. Governments are broadly cautious, but the sustainability of deficits remains a key vulnerability that could quickly come into focus in the event of policy missteps.

An overall constructive outlook—conditional on stability

Despite elevated risks, the outlook remains cautiously optimistic. The global economy is undergoing a profound transformation driven by technological innovation, geopolitical shifts and large-scale investment cycles. This creates a foundation for continued growth and resilience—provided major disruptions, particularly in energy markets or policy decisions, are avoided.