Mega forces will reshape markets, says BlackRock

They include impact of AI, inflation due to new energy transition, slower China growth

- Ven Sreenivasan

Cyclical factors were the key determinants driving financial markets over the past four years, but 2025 and beyond will see mega forces calling the tune, according to investment giant BlackRock.

Mr Ben Powell, chief investment strategist for the Middle East and Asia Pacific at BlackRock Investment Institute, believes the old playbook that investors used in the post-Covid-19 era will not work any more.

"We are looking at a very different future because of mega forces impacting the structure of the global economy, markets and societies," said Mr Powell.

These forces include the impact of artificial intelligence (AI), inflationary pressures caused by the transition to new energy, slowing growth in China, the impact on supply chains caused by geopolitical factors and the changing future of finance.

Mr Powell (no relation to US Federal Reserve chief Jerome Powell) told The Straits Times this week that the roll-out of AI will see an acceleration of capital expenditure over the coming years. The AI market is expected to grow from US$200 billion (S$273.8 billion) now to US$1.8 trillion by 2030.