Growth forecasts mean you should urgently think strategy

Growth forecasts are getting worse, thanks to huge uncertainty in global markets. Good corporate leaders know that this is an urgent call to action. 

Since the beginning of this year, running a business has become an exercise in navigating chaos. The OECD’s recent downgrade of the 2025 global growth is a testament to that. 

It has revised growth estimates for this year, decreased projected global GDP growth to 2.9% from 3.1%, with the same figure for 2026. 

“The global outlook is becoming increasingly challenging,” it said, noting that current global standoffs over trade and tariffs, which began as soon as President Trump took office in the United States, were the main reasons that growth projections suffered a decline. 

Not only that, the report also urged governments with central roles in the dispute to get to the negotiating table and produce an agreement, or else there would be further “marked adverse effects on growth” in the coming months. 

“Weakened economic prospects will be felt around the world, with almost no exception,’ warned OECD chief economist Alvaro Pereira.

Absolutely. Corporate leaders must respond to issues like growth forecasts and ask the right questions about their own companies.

Every good business progresses because of a solid growth strategy, thought up by managers and executives, and scrutinised and approved by the board. 

The critical requirement is that these strategies are able to change when the market fluctuates. For example, when there’s an ongoing trade war, driven by strong rhetoric and flip-flop decision-making. While your company might be caught in the middle of that, it’s no excuse for not being able to adapt. 

When growth strategies don’t align with the wider economic context, the results can be painful. Expectations which made sense at the start of Q1 can become nonsensical by the end of Q2. Targets can be missed, expenses can rise, profits can suffer. 

Explaining this to investors and employees, particularly without a clear game plan for what to do next, is a situation you do not want to be in.

Perhaps, but it comes down to your company and the environment around it. The crucial task is to do the correct analysis to ensure you’re clear on whether the growth strategy is still okay, needs minor adjustments, or a serious overhaul.

Strategy is central to corporate success, and a lot of stakeholders will want updates on how it evolves. The problem is that the process of adjusting strategy during times of urgency can often leave those updates out. As a result, key stakeholders may be in the dark about what you’re planning and why you’re planning it – only finding out when enough has changed to put them on the back foot immediately. 

Don’t do this. Ensure that you stay in touch with stakeholders throughout. If there is a growth issue, let them know. Tell them what you’re planning, and keep them informed with how it’s going.

Tariffs and global trade are at the centre of the OECD’s growth revisions. So, if you’re readjusting your own company’s growth strategy, you need to assess the impact of current world events on your ability to do business. 

How does the current global map of import/export tariffs affect you? How might that change in the next six months? What’s the relationship like between the governments of the areas you do business, and how might they change? 

Quantifying this as far as possible will help you appreciate the scale of the challenge. It might show that you have little to worry about, and if so, great. But if it shows you need to make changes, then at least you have an idea of how many from the start. 

Governance experts will often tell you that supply chain resilience is critical. After all, you need to be able to keep business going during the more random disruptions like natural disasters, consumer mood changes, or a ship accidentally lodging itself in the Suez canal.

When it comes to growth, supply chains could be your saving grace. 

Diverse supply chains may be the key to avoiding, or at least minimising, the impact of global trade wars and flip-flop tariffs. Efforts to strengthen your supply network can include nearshoring, dual sourcing, investing in technology, or building stronger partnerships with suppliers in other jurisdictions.

This is as good a time as any to demonstrate the importance of scenario planning, especially at the corporate leadership level. 

It’s a serious issue for leaders to have to face trade wars and tariff chaos, but it’s even more serious if it comes as a complete surprise. You need to make sure that you have contingency plans in place. 

It’s a difficult task in the current climate. Much of the tariff chaos currently comes from the United States, where the mood can change daily (let alone weekly or monthly). Because of that, scenario planning gets complicated quick, spinning off into endless possibilities that you need to consolidate into manageable solutions. 

The solution is to invest now. Use all tools at your disposal, from trained experts in geopolitics and trade to the most cutting-edge AI-powered solutions which can boil swathes of data down into figures you understand. 

No stakeholder is going to wait for your business to catch up with changing economies. As far as they’re concerned, everyone is aware that trade wars, tariffs and cross-border standoffs are the new norm. So, at this point, preparation is key. 

The OECD has revised growth projections downwards, and may do so again depending on how the next few months play out. 

Your business might be fine, or it might not. The important thing is to ask critical questions about its resilience, because the last thing you want is to fall short of goals and for stakeholders to see it as a shock. 

Growth forecasts mean you should urgently think strategy – The Corporate Governance Institute