“The world’s fine” and there’s too much pessimism, with pockets of opportunity to be found across the globe — particularly in Middle East countries and some emerging markets, BlackRock Chair and CEO Larry Fink told delegates at the World Economic Forum’s annual Davos event.
Speaking on a panel focused on "Saudi Arabia’s Economic Shifts," the leader of the world’s largest asset manager, with $11.6 trillion in assets under management, said that while there are “imbalances here and there, and there are many social issues in the world that need to be addressed … the world’s fine, humanity is improving, things are getting better overall.”
He did, however, reiterate comments he made earlier at the event, that inflation is a risk. “I truly believe we still have one risk,” being inflation. “That is probably this one thing that I’m still fearful of, and a lot of it is that I see more and more imbalances, and the imbalance can create that type of inflation.”
Inflation is the biggest risk to the U.S., too, he said.
“I’m highly bullish on the U.S. economy, if the Trump administration unlocks private capital as they’re talking about, if they streamline permitting (of projects) — hopefully Europe follows,” he said. “The opportunities in the GCC (Gulf Cooperation Council countries) are really fantastic. But the risks still remain that I could see elevated inflation that’s not in everyone’s viewfinder. And there is some probability — not in the 50% (range) but lower — that we could see the 10-year Treasury breaking 5%, which would disrupt a lot of things.”
Fink added: “I’m not just a euphoric optimist, but I’m pragmatically enthusiastic about where the world is, where we could go, the opportunity.”
If private capital can be unlocked in Europe, the U.S. and Saudi Arabia — where the government is looking for the private sector to represent 65% of gross domestic product by 2030 — “I think we’re going to have an extraordinary five years in front of us,” Fink said.
Kristalina Georgieva, managing director at the International Monetary Fund, said on the same panel discussion that “it is remarkable how resilient the world economy has proven to be,” referring to the COVID-19 pandemic, energy and food price shocks, and jumps in interest rates. The IMF upgraded its outlook for global growth in 2025 to 3.3% in January, from a 3.2% projection in October.
The U.S. “is a big driver of that picture,” while the Persian Gulf countries also are part of that growth projection. Other parts of the world are “wobblier,” such as the European Union.
Fink added that there are pockets of opportunity in South America, in India and other parts of Asia.
“There’s just too much pessimism. It’s pessimism, it’s not realism. Things are changing, and most people don’t like change,” he said, citing the growth of artificial intelligence as something that instills fear but is an opportunity.
He also said that “capitalism works, by the way.”
Honing in on Saudi Arabia, Mohammed Al-Jadaan, minister of finance for the kingdom, said the whole point of Saudi Vision 2030 is to deal with shocks; “to make the economy more resilient; to totally, totally unlock this relationship between oil and oil volatility, and the economy. Decoupling is happening … and we are very proud of it, but we are not complacent,” he said.
BlackRock is “trying to enlighten more of our private investors … to see the opportunity to invest” in the Gulf region.
And “as a neighborhood gets safer, more and more tourists are going to be coming, and more and more opportunities. I look at the neighborhood and it’s a pretty fine neighborhood,” Fink added.