Written by Hamid R. Azarmi, head of Business Development

As 2025 comes to an end, the global economy shows signs of stabilisation with the IMF projecting 2.8 percent global growth, reflecting easing inflation and the possibility of interest rate cuts in 2026.

While growth has not fully returned to pre-pandemic levels, markets have benefited from policy consistency and improving macroeconomic conditions. Investors have repositioned portfolios by moving toward higher-quality assets, extending fixed income duration, and focusing on resilient sectors, including infrastructure, energy transition, and income-generating alternatives.

Structural challenges remain, such as elevated government debt and widening geopolitical tensions, but the overall environment has shifted toward cautious confidence. A defining theme of 2025 has been the rapid rise of artificial intelligence as a transformative force in global markets. 

Nvidia becoming the world’s most valuable public company highlights the extraordinary surge in demand for AI infrastructure, with data centre revenues expanding by more than 400 percent in some quarters.

AI is now deeply embedded in investment strategies, influencing asset allocation, risk management and portfolio construction, while private capital increasingly targets AI-linked sectors such as data hubs, logistics and automation.

Moving into 2026, inflation is cooling and financing conditions are expected to ease, opening opportunities across digital infrastructure, sustainable investment themes and emerging market debt.

Yet investors must remain vigilant amid geopolitical uncertainty and climate-related risks. Those who embrace technology, strategic diversification and long-term planning will be best positioned to navigate a slower but more opportunity-rich global landscape.