Fiscal tightening
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I have spent much of my career in a world where money felt abundant. Low interest rates shaped how organisations invested, hired, and expanded. We are now at the end of that era, and the shift is more structural than many people realise.
Fiscal tightening is the new context. Inflation forced central banks to raise rates, and even as price increases slowed down, the cost of capital remains high. The debt built in the years of cheap money is now a constraint. Public budgets are stretched. Companies are refinancing at levels that were hard to imagine a few years ago.
This matters because it changes how decisions are made. Initiatives that once sailed through internal approval now face harder questions. The pace and scale of projects are being reconsidered. The bar for returns is rising. In my own work, we are even more focused on productivity and cash discipline. Long lists of priorities are giving way to tighter agendas.
Governments face similar limits. The political space for broad spending programmes is narrow, so intervention is now much more targeted. Industrial policy is becoming the primary lever because it allows states to support specific sectors without expanding the entire fiscal base. It is a selective approach that places more weight on national priorities and less on universal provision.
Private markets are adapting as well. Venture and private equity firms must operate in a climate where leverage is no longer a simple tool. I hear more conversations about sustainable growth and fewer about rapid scale. Valuations and exit timelines are adjusting to reflect the cost of capital rather than the promise of future liquidity.
Only a small proportion of our current leaders have worked in a truly constrained environment. This period requires a mindset built on focus and deliberate choice. Something we are all going to have to get used to.
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