Economic Recovery Post-Pandemic

Reflecting on a busy and eventful 2024, I wanted to share my key takeaways from this year’s engagements and speeches. 𝟭. 𝗠𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝗚𝗹𝗼𝗯𝗮𝗹 𝗣𝘂𝗯𝗹𝗶𝗰 𝗗𝗲𝗯𝘁 𝗟𝗲𝘃𝗲𝗹𝘀 Global public debt has grown sizably over the last few years and is projected to approach 100% of GDP by the end of this decade. We need a strategic pivot in global fiscal policy – ensuring that governments will have the resources needed to invest in structural transformations, including climate change, and to fight the next crisis. Countries need a strategy that focuses on growth, that has effective guardrails to ensure compliance, and that builds in close engagement with all stakeholders including civil society to have the greatest chance at success. More here: https://lnkd.in/gw3uswMS   𝟮. 𝗡𝗮𝘃𝗶𝗴𝗮𝘁𝗶𝗻𝗴 𝗙𝗿𝗮𝗴𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻, 𝗖𝗼𝗻𝗳𝗹𝗶𝗰𝘁, 𝗮𝗻𝗱 𝗟𝗮𝗿𝗴𝗲 𝗦𝗵𝗼𝗰𝗸𝘀 Russia’s invasion of Ukraine has had a profound impact. This conflict not only affected Ukraine and its neighbors but also reshaped the global economy. Increased fragmentation and higher defense spending are now realities we must navigate. Central banks need to adapt their strategies, and coordinated fiscal, financial, and structural policies are crucial to maintain macroeconomic stability in this more shock-prone environment. More here: https://lnkd.in/gm4yUHhq 𝟯. 𝗚𝗲𝗼𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝘀 𝗮𝗻𝗱 𝗶𝘁𝘀 𝗜𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝗚𝗹𝗼𝗯𝗮𝗹 𝗧𝗿𝗮𝗱𝗲 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗗𝗼𝗹𝗹𝗮𝗿 The pandemic and geopolitical tensions have led countries to reassess their trading partners and economic strategies. There's a noticeable shift in foreign direct investment flows along geopolitical lines. These changes underscore the dynamic nature of global trade and the need for adaptable economic policies. More here: https://lnkd.in/g9cbVUjQ 𝟰. 𝗖𝗿𝗶𝘀𝗶𝘀 𝗔𝗺𝗽𝗹𝗶𝗳𝗶𝗲𝗿? 𝗛𝗼𝘄 𝘁𝗼 𝗣𝗿𝗲𝘃𝗲𝗻𝘁 𝗔𝗜 𝗳𝗿𝗼𝗺 𝗪𝗼𝗿𝘀𝗲𝗻𝗶𝗻𝗴 𝘁𝗵𝗲 𝗡𝗲𝘅𝘁 𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗗𝗼𝘄𝗻𝘁𝘂𝗿𝗻 While AI can drive efficiency, it can also pose risks, especially during economic downturns. In the next downturn, AI could threaten a wider range of jobs than in past cycles. AI systems, trained on past data, may struggle with novel events, potentially exacerbating financial instability. To mitigate these risks, we must ensure tax systems do not favor automation over people, support workers affected by AI, and adopt measures to reduce financial and supply-chain amplification risks. More here: https://lnkd.in/gnM-XZtC   As we move into 2025, these challenges will remain top of mind as we work to foster a more resilient global economy. Wishing you all a prosperous and impactful new year!

Updated Economic Outlook 2025-26: Riders on the Storm, Managing Uncertainty. As Chief Economist, I'm often asked: "How do we navigate an environment where geopolitics increasingly dictates economics?" Today, that question is more urgent than ever ⬇️ 📉 The global economy is bracing for its weakest expansion since the pandemic—+2.3% GDP growth in 2025—as we enter what can only be described as a new era of trade-driven uncertainty. The US has triggered a full-scale trade war, with tariffs on Chinese imports now reaching an effective 130%—the highest global import tariff rate since the 1890s. 🚨 Uncertainty is now the new macro regime. The policy shockwaves are already being felt: The US is expected to enter a mild recession in 2025. Europe’s growth prospects are also dimming despite fiscal support. Inflationary pressures are back in the US—headline inflation is set to peak at 4.3% this summer—even as the Fed holds rates in a delicate balancing act. Meanwhile, the ECB is likely to ease further, reflecting stark regional divergence in monetary policy. 🌍 In this environment, emerging markets are responding with agility—either by diversifying trade partners or fast-tracking bilateral deals with the US. Asia and Latin America are poised to benefit, though the fog of the trade war remains dense. 🏭 On the corporate front, firms are adapting—frontloading imports, diversifying supply chains, and in many cases, passing on costs to consumers. But while strong brands may absorb the shock, lower-margin sectors are under pressure. 📈 Capital markets? They underestimated the impact of Trump’s second term. Post-Liberation Day, we've seen a decisive shift to risk-off: falling yields, weaker equities, and a rethinking of central bank policy paths. Volatility is here to stay—but opportunities remain for the vigilant. As we move through 2025, one thing is clear: Strategic clarity and agile risk management will be essential to weathering this storm. #GlobalTrade #EconomicOutlook #RiskManagement #Insurance #Recession2025 #USChina #Tariffs #CapitalMarkets #Inflation #Geopolitics #Ludonomics #AllianzTrade #Allianz

〽️$800bn in software market cap erased in a single week! What an extraordinary week on the financial markets. Call it the Anthropic moment if you want — certainly not the beginning of a SaaS winter. In fact, this was merely the confirmation of a long‑forming structural shift. Let’s look at three essential KPIs: • Revenue multiples have returned to ~4x — back to 2016–2018 levels, after peaking above 10x in the post‑COVID period. • Free cash‑flow multiples have normalized around 25x, down from the 40–50x heights of 2020–2022. • Growth rates remain stuck in the low double digits. So what is really happening? It’s certainly not about weak earnings — they remain solid across the board. It’s about narrative. Software companies have lost their storyline in the AI adoption cycle. Investors have temporarily lost conviction in their role in the future AI tech stack. Going forward, value creation in software will be shaped by three fundamental pillars: • Productivity leap in 2026/27 • Stickiness & Legacy • Agents & Connectors Expect significant workforce restructurings over the next 24 months. Productivity gains of 30% — even 50% — across functions such as coding, sales, and marketing are now within reach. AI-related capex will rise, but remain modest compared with hyperscalers and consumer platforms. Combined with sustained double‑digit growth, this will expand free cash flow materially. It will help the stocks to bounce back in the short term. At Sia, supporting more than 1,000 major tech and blue‑chip companies worldwide, we have a privileged vantage point on enterprise‑wide architecture decisions. We see what’s moving — and what isn’t. What we don’t see. No major client is abandoning SAP, Salesforce, Oracle, or Workday. Not happening. The real question is whether these platforms are gradually becoming the new legacy layer — just like pre‑ERP and pre‑Internet operating systems once did. We also don’t yet see decisive, long‑term commitments on the central AI tech stack. Yes, enterprises are integrating OpenAI , Anthropic, Databricks — and these are not pilot experiments anymore. But previous‑generation platforms struggle to become agentic‑native. Their agentic layers remain confined to their sandboxes, and their coding agents and connectors lag significantly behind AI‑native players. The software generation born in the 2000s has clearly lost a battle. Have they lost the war? I don’t believe so. Will all of them create value in the AI era? Certainly not. Will next‑generation AI stack providers prove they can meet the world’s highest cybersecurity standards? That remains to be demonstrated. It’s time for the financial analyst community to stop treating this sector as a monolithic block. A new cycle is beginning — and it’s going to be the most exciting phase the software industry has ever seen. Barsaoui Fares SEBASTIEN CHARREIRE Matt Fahey Kevin Brockman, MBA, MS Nicolas Duplessis, P.Eng. Gary O'Sullivan David Martineau

In 2005, when Thomas Friedman proclaimed “the world is flat,” globalisation appeared irreversible. The fall of the Berlin Wall, China’s entry into the WTO, the rise of the internet and the spread of global supply chains compressed distance and time. The assumption was that economic integration would lead to rising prosperity and a shared stake in stability for everyone. Two decades later, the world looks anything but flat. The 2008 global financial crisis was the first fracture. It exposed how deeply interconnected the system was, but also how unevenly its risks and rewards were distributed. Inequality widened within countries even as millions were lifted out of poverty globally. Then came geopolitics. Supply chains that had been optimised for cost and efficiency began to be seen as vulnerabilities. The pandemic delivered the shock therapy as Governments discovered how dependent they were on distant factories for essential goods. During the era of “hyper-globalisation” (1990–2008), global trade grew almost twice as fast as world GDP. After the global financial crisis, trade still grows, but no longer faster than the world economy. Capital flows tell a similar story. Foreign direct investment peaked before 2008 at over 5% of global GDP and has since fallen to roughly half that level, while becoming more volatile and more nuanced. Investment is more regional, more strategic and less frictionless. Supply chains, once optimised ruthlessly for cost, are now being redesigned for resilience. This shift from efficiency to redundancy leads to structurally higher costs and more inflation volatility. If globalisation delivered such clear economic benefits, what caused its slowdown? The core reason is not economic failure, but political. Globalisation grew global output, but it did not distribute gains evenly within countries. In many economies, wages stagnated even as profits and asset prices rose. Communities lost jobs faster than they gained new ones. This domestic backlash then collided with geopolitics. The pandemic and the war in Ukraine reinforced the lesson: efficiency without control can be dangerous. The deeper issue was institutional. Capital moved freely but safety nets remained national. When shocks hit, citizens turned to governments, not global systems, for protection. The implications for the global economy are profound. Growth is becoming more fragmented, less synchronised. Inflation is likely more volatile. The world economy looks less like a single engine and more like loosely connected regional systems. What lies ahead is not de-globalisation, but re-globalisation with constraints. A world of blocs, buffers and “trusted” networks. Less flat, more uneven. Less efficient, more resilient. The age of frictionless globalisation may be over, but interdependence is not. The challenge now is managing it without letting fragmentation become the new systemic risk.

Would you be ready if you got the pink slip- the layoff email tomorrow? The news of Infosys laying off 700 employees and job cuts across major US tech companies—Amazon, Meta, and others—is unsettling. Layoffs are becoming a harsh reality in 2025, and uncertainty looms large. When the dagger of layoffs hangs over our heads, panic and fear are natural. But instead of worrying about what's beyond our control, let's focus on what we can control: being proactive, staying agile, and preparing ourselves for any career shifts. Here’s how you can safeguard yourself in these uncertain times: 1️⃣ Upgrade & Upskill "The best time to learn was yesterday. The next best time is today." 📍Stay relevant by continuously upskilling in high-demand areas. 📍Explore courses in AI, cloud computing, cybersecurity, and data analytics, as they remain recession-proof. 📍Attend industry webinars, networking events, and certifications to stay ahead. 2️⃣ Expand Your Network "Your network is your net worth." 📍Engage actively on LinkedIn, attend meetups, and connect with professionals in your field. 📍Join relevant groups and communities to stay updated on new opportunities. 📍Seek mentorship and peer support—opportunities often come from unexpected places. 3️⃣ Build a Strong Personal Brand 📍Optimize your LinkedIn profile—make it recruiter-friendly. 📍Showcase your expertise through posts, articles, and sharing industry insights. 📍Highlight your skills, achievements, and problem-solving capabilities to stand out. 4️⃣ Be Financially Prepared 📍Maintain an emergency fund covering 3-6 months of expenses. 📍Explore multiple income streams—freelancing, consulting, or passion projects. 📍Reduce unnecessary expenses and focus on financial stability. 5️⃣ Stay Positive & Adaptable "A layoff is not the end—it’s a redirection, not rejection." 📍Stay mentally resilient, practice self-care, and don’t hesitate to seek support. 📍Adaptability is key—be open to contract roles, remote work, or even industry shifts if needed. Final Thought: "You can’t control the waves, but you can learn to surf." 🌊 💫While we can’t predict the future, we can control how we prepare for it. Stay proactive, stay agile, and keep growing. 💫 Let’s support each other in these times. If you’ve faced a layoff before, what strategies helped you bounce back? Share in the comments! #Layoffs #CareerGrowth #Resilience #Networking #PersonalBranding #Upskilling #JobSearch #StayPrepared

The last time the tech industry spent this fast with this little proof it worked, it was 2021. We know how that ended. This week Uber's COO went on a podcast and said what most boardrooms are thinking but nobody wants to say out loud. 70% of their committed code is now AI-generated. 95% of their engineers use AI tools every month. And he still cannot draw a line between any of that and a single improvement for consumers. His exact words: "That link is not there yet." Four months into 2026, Uber had already burned through its entire annual AI budget. The COO called it a "head-exploding moment." They are not alone. Microsoft just cancelled AI coding tool licenses for the division that builds Windows, Office, and Teams. Deadline June 30. Nvidia's VP of Deep Learning told Axios that AI compute now costs his team more than the employees using it. Meta ran an internal AI leaderboard called "Claudeonomics" across 85,000 employees. 60 trillion tokens in 30 days. They shut it down after the numbers leaked. $740 billion in AI capital expenditure has been committed for 2026. An MIT study found AI is only cost-effective in 23% of the roles they studied. That means in 77% of cases, humans are still cheaper. This is the post-COVID tech cycle repeating in real time. Massive overspend. Hiring freezes. Then the painful admission that the math never worked at that scale. And just like 2022, the people who will be in demand on the other side are not the ones building the hype. They are the engineers, the architects, the infrastructure people who can make the surviving systems actually work. The AI bubble will not pop with a headline. It will deflate one budget review at a time. And the companies left standing will be the ones that built infrastructure, not dashboards. So here is the question nobody in your leadership team wants to answer right now: if your CFO asked you tomorrow to show the return on your AI spend, could you? #AI #EnterpriseAI #Fintech #TechLayoffs

Reindustrialization has firmly entered the mainstream. Today, nearly three‑quarters of large organizations are reshaping their manufacturing and supply chains through friendshoring, nearshoring or reshoring - up from fewer than 60% just two years ago. What’s changing now is the nature of the investment. While overall spending is easing, decisions are becoming far more deliberate and targeted - focused on striking the right balance between limiting dependency risks and strengthening market competitiveness.   The Capgemini Research Institute’s latest report, “The resurgence of manufacturing: Reindustrialization strategies in Europe and the US, 2026”, offers essential insight into the forces and context shaping technology investment and transformation today.   These themes will, no doubt, be front and center this week at #HannoverMesse2026, where resilient, sustainable manufacturing and operations are no longer optional - they are strategic imperatives.   Read more about the report here: https://lnkd.in/ed-QMzcH

India got its own Zara, but faster, louder and most IMPORTANTLY, fully made in India. And now, it delivers your outfit in 10 minutes. Meet SNITCH, a brand that’s doing over ₹100 crore in monthly revenue, valued at ₹2,500 crore, and is now entering quick commerce. 5 years ago, Snitch was just a tiny menswear experiment from Bangalore. Selling shirts to retailers, no hype or D2C dream. Then the pandemic hit, and they changed, from B2B to D2C, from racks to reels. Today, Snitch has become a case study in how to build desire. - 55 offline stores and still counting - Presence across 20+ states  - 35 new styles dropping every single day. Co-ords, prints, oversized fits, all designed for Indian men who finally stopped pretending to be Zara models. And now, they’re taking the biggest leap yet, entering quick commerce. Yes, you read that right. The same way you order Coke or chips on Blinkit, you’ll soon be able to order a shirt. 10 minutes before a party. Delivered before the DJ starts. Sounds wild, but it’s already happening. Snitch has the local inventory, offline muscle, and a Gen Z audience that shops faster than it thinks. And once fashion enters q-commerce, speed stops being logistics but becomes marketing. Because if Blinkit can sell ice cream in 10 minutes, Snitch can sell confidence. And Snitch is not the only brand doing this; there are multiple others: BEWAKOOF®, The Souled Store, and Rare Rabbit are already building instant delivery pipelines. Even H&M and Zudio Trent Limited have started testing hyperlocal pilots through 3rd-party delivery partners in metro cities. All these brands have realised the same truth: Q-commerce is not just for food or groceries but a new distribution layer for everything that sells emotion. The competition will come down to who owns speed, stock, and storytelling. Because in this game, the brand that reaches your door 1st also wins your mindshare. Groceries did it first, beauty followed, and now fashion is stepping in. Because India doesn’t wait anymore; not for meals, clothes, or trends. Snitch is proof that the next big battle in Q-commerce won’t be for essentials but for style.

For years, I've witnessed the ebbs and flows of the #ITservices industry, but the recent whiplash from the COVID-19 boom to today's slowdown has been unprecedented. While the pandemic hiring spree has ended, we're still grappling with its aftereffects. Profit margins at Wipro and Infosys haven't fully recovered to pre-pandemic levels, reminding us of those days when rapid demand fueled aggressive hiring. Only Tata Consultancy Services has managed to restore its margins to FY20 levels, though they're still a far cry from their FY15-FY19 highs. As someone who's been in the trenches for decades, I see sticky costs as a major drag. We scaled up rapidly during the pandemic, and reversing that momentum is proving difficult. Meanwhile, wage hikes are essential to retain talent, further squeezing margins. This situation is reflected in a declining employee base across all three companies as of March 2024. To combat this, we're seeing a shift to focus on optimal utilization, with levels increasing at Wipro and Infosys. However, Infosys' March 2024 quarter saw sequential profit margin declines despite wage hikes and revenue dips. I attribute this to headwinds from salary increases and the initial ramp-up costs of large deals, with only partial relief expected from further utilization gains. Of course, there's the one-off factor, as Infosys' management cites contract rescoping impacting their profitability in FY24. Adjusted for this, operating margins would appear closer to FY20 levels at 20-22%. Wipro's Q4 FY24 results show some improvement, but management remains cautious, expecting margins to remain rangebound in the near term. 𝐒𝐨, 𝐡𝐨𝐰 𝐝𝐨 𝐰𝐞 𝐛𝐫𝐞𝐚𝐤 𝐭𝐡𝐢𝐬 𝐜𝐲𝐜𝐥𝐞? Companies are eyeing a familiar playbook: optimizing the employee pyramid, increasing utilization, and taming subcontractor costs. TCS is adding pricing adjustments to the mix. But my experience tells me that 𝐩𝐫𝐢𝐜𝐢𝐧𝐠 𝐩𝐨𝐰𝐞𝐫 𝐢𝐬 𝐚 𝐥𝐨𝐧𝐠 𝐠𝐚𝐦𝐞 – it takes time to negotiate better rates during renewals or new contracts. Plus, with a slowdown in discretionary spending, there's doubt about major pricing improvements anytime soon. Further, Infosys’s focus on pricing may be more about COLA than value-based pricing in this challenging environment. That leaves us with the ultimate lever: 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 𝐠𝐫𝐨𝐰𝐭𝐡. While cost optimization is important, revenue growth is the key to restoring healthy profit margins. This will enable companies to absorb higher wage costs and better leverage their fixed cost base. To substantiate, take an IT company with following numbers: - Baseline (FY24): $2B revenue, 18% profit margin => $360M current profit. - Growth Target (FY25E): Aim for 10% revenue increase ($2.2B). With costs held constant, a 22% profit margin yields a $484M target profit. - Cost Challenge: We need to find an additional $124M in profit. Should revenue growth stumble, a 7.56% expense reduction would be required which would be challenging.