As economies adapt to a shifting global landscape, practitioners seek pathways to stability and growth.
Macro Backdrop: Slow Growth, Persistent Shocks, Fragmentation
In 2025, the world operates under a low-to-moderate growth, high-volatility regime that reshapes policy and investment choices. According to the IMF, global growth is projected to ease from 3.3% in 2024 to 3.2% in 2025 and further to 3.1% in 2026, while advanced economies hover around 1.5% and emerging markets sustain just above 4%.
UNCTAD forecasts a deceleration from 2.9% in 2024 to 2.6% through 2026, below pre-pandemic trends near 3% and well beneath the 4.4% average seen before 2008. The World Bank’s more cautious outlook predicts a dip to 2.3% growth in 2025 with only a tepid rebound thereafter.
Inflation trends are moderating but remain above target in the United States, while central banks face upside risks from fiscal spending and protectionist pressures. As Goldman Sachs AM warns, the next cycle will be marked by higher inflation, elevated interest rates, and heightened macro volatility.
Trade-Finance Nexus and Fragmenting Architecture
The intricate link between trade and finance has never been more pronounced. Over 90% of world trade now hinges on financial instruments, deepening both opportunity and vulnerability.
Early 2025 saw a front-loaded rebound in shipments as firms rushed to beat new tariffs and ramp up AI-related investments. Once temporary boosts fade, trade growth settles around 2.5–3%, leaving a slowdown looming on the horizon.
- Approximately 60% of companies reported rising trade finance volumes in the past year.
- Nearly 73% expect further increases in the next 12–18 months.
- Supply-chain finance, letters of credit, and export credit agencies underpin modern commerce.
Concurrently, rising tariffs and geopolitical risks drive onshoring, diversifying supplier networks, and inventory build-ups, all of which intensify demand for liquidity and risk mitigation tools. This financialization of trade transforms the lifeblood of global commerce.
Meanwhile, the global financial system is evolving into a mosaic of regions. Governments prioritize resilience through bilateral agreements, alternative payment rails, and intermediary currencies, eroding a singular, U.S.-centric framework and increasing complexity for cross-border operators.
Key Markets and Instruments: From Payments to Programmable Money
The payments sector stands out as the most profitable slice of global finance, yet it faces seismic shifts. Global payments revenues neared $2.5 trillion in 2024, fueled by $2.0 quadrillion in value flows and 3.6 trillion transactions.
- Payments revenues grew 7% annually between 2019 and 2024, slowing to 4% in 2024.
- Interest income constituted 46% of total payments revenues last year.
- Cash usage dipped to 46% of global volumes, while digital wallets rose to 30% of POS transactions.
Looking ahead, net interest income is expected to grow at only ~2% per year through 2029, and transaction-based revenue will face pressure from emerging low-cost rails such as account-to-account payments and digital wallets.
Innovations in stablecoins and tokenized money are accelerating. Stablecoin issuance has doubled since early 2024, and daily volumes approach $30 billion, a fraction of global flows but a clear harbinger of change. Programmable money and intelligent agents promise to optimize payment timing and routing, compressing interchange fees and yield spreads and challenging traditional intermediaries.
In this context, large financial institutions must reinvent their value propositions or risk disintermediation by nimble fintech firms and tech giants eager to seize settlement and liquidity inefficiencies for themselves.
Strategic Responses for Policymakers, Firms, and Investors
To thrive amid fragmentation and volatility, stakeholders must adopt tailored strategies. Policymakers, corporate leaders, and asset managers each face distinct imperatives.
- Policymakers should coordinate on regulatory frameworks for digital assets, bolster financial safety nets, and pursue trade agreements that balance openness with resilience.
- Firms need to diversify funding sources, deploy dynamic hedging against policy shocks, and integrate cross-border payment solutions to maintain liquidity in a fragmented landscape.
- Investors ought to recalibrate portfolios toward assets that benefit from regionalization trends—such as local currency bonds—and embrace alternative instruments like infrastructure-linked securities and green finance.
Importantly, scenario planning can map potential paths: from deepened fragmentation with multiple currency blocs to renewed cooperation via cross-border CBDC corridors. By stress-testing portfolios and operations against each scenario, organizations gain agility and foresight.
Additionally, investing in data analytics, AI-driven risk models, and digital compliance tools can turn volatility from a threat into a source of competitive advantage.
Charting a Course Through Choppy Waters
The era of benign globalization has given way to contested terrain marked by slower growth, persistent shocks, and complex regional dynamics. Yet within this complexity lie opportunities for those equipped with foresight, adaptability, and a clear strategic vision.
By understanding the regionalized financial systems, leveraging advanced payment innovations, and crafting resilient policies and investment frameworks, stakeholders can navigate international waters with confidence.
Ultimately, the future of global finance will be defined by the ability to blend cooperation with resilience, to innovate within regulatory bounds, and to anticipate the next wave of transformation on the high seas of economic change.
