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Kearney's Global Economic Outlook: Unsteady Ground Ahead

Kearney's latest report, the Global Economic Outlook for 2025-2027, emphasizes a period of increased volatility and structural challenges in the world economy. The document, aptly named 'Unsteady Ground', forewarns stakeholders about persistent economic fragmentation, geopolitical tensions, and turbulence likely to shape the global market landscape.

Overview of Volatility

The current economic climate is characterized by several disruptive factors that are reshaping traditional forecasts. Issues such as economic policy uncertainty, inflation that refuses to budge, and rising geopolitical risks are now considered structural as opposed to temporary hurdles. This ongoing volatility is expected to set a new baseline for businesses worldwide, prompting them to rethink how they operate.

According to Erik Peterson, managing director of Kearney's Global Business Policy Council, "Businesses must adapt to a world where competitive advantage depends not only on innovation but also on navigating geopolitical risks and enhancing resilience."

Growth Projections

The report elaborates that the global economy is expected to experience average growth of approximately 2.7% through 2027. While this marks a slight improvement from earlier 2025 projections, it remains subdued compared to expectations set at the beginning of the year. Explaining the dynamics, Kearney points out that regions will exhibit discernibly different growth trajectories, driven largely by varying levels of resilience and investment.

Regional Insights

Asia and Australasia have emerged as the fastest-growing regions, projected to achieve an impressive 3.7% growth, thanks primarily to India's robust economic performance. In contrast, the Americas and Europe reflect more tempered growth, anticipated at 2.1% and 1.3% respectively.

This disparity is further fueled by strategic investments and efforts at economic diversification prevalent in the Middle East and Africa, where growth is expected to reach about 3.5%.

The Role of AI

Another pivotal wildcard in this evolving landscape is artificial intelligence (AI). With estimated global investments in AI set to soar to $375 billion by 2025 and potentially hit $500 billion the following year, this technology holds the promise of substantial productivity gains.

Yet, caution is warranted. Kearney's report indicates that the benefits of AI may disproportionately favor leading firms and advanced economies, thereby exacerbating socio-economic inequalities. Terry Toland, principal at Kearney, highlights opportunities for market disruptors, stating, "The companies that invest in resilience, diversify risk, and lead with purpose will define the next era of global growth."

Conclusion

In summary, Kearney's Global Economic Outlook presents a sobering view of the challenges ahead. Businesses are urged to adopt innovative practices and nurture values that resonate with their stakeholders. As uncertainty looms, adapting to the evolving economic landscape stands as the quintessential challenge for companies eyeing success in the coming years. This report is a clarion call for reimagination and strategic repositioning.

For additional insights and past reports, visit Kearney's Global Economic Outlook page.

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Lengthy preparations and astute transitions will define the road ahead. As the world grapples with an unsteady ground, it is vital for businesses to adapt and thrive.

About Kearney

Founded in 1926, Kearney has established itself as a preeminent management consulting firm serving the Fortune Global 500 and governments. Operating in over 40 countries, Kearney commits to delivering tangible results and impactful solutions.