Fragmented World: The Looming Risk for Global Markets

The world economy is fragmenting, creating risks of low growth and higher inflation, according to Norway's sovereign wealth fund CEO. The fund sees potential market volatility if this scenario persists. Tangen emphasizes companies profiting by resisting price pressures and highlights the rise of AI in fund operations.

As the global economy shows signs of fragmentation, Norway's $1.8 trillion sovereign wealth fund raises alarms about the potential threats looming over financial markets. CEO Nicolai Tangen of Norges Bank Investment Management (NBIM) suggests that decoupling could lead to low growth and heightened inflation.

The fund, invested across various asset classes, posits that a 'fragmented world' scenario could slash its value by up to a third. Despite weeks of volatility, markets remain stagnant for 2023. This anomaly has left market analysts puzzled about future trajectories in such turbulent times, says Tangen.

In a world rife with geopolitical tensions—from tech to trade wars—companies resilient enough to withstand price pressures or leverage AI technologies could fare better. Tangen's recent reappointment as NBIM's CEO highlights his continued focus on optimizing the fund's operations and embracing technological advancements.

(With inputs from agencies.)