The threat of recession, the cost of living crisis and mounting debt distress will dominate the global economy in the next two years as it struggles to move on from the pandemic and war in Ukraine, according to a survey by the World Economic Forum (WEF).
Its Global Risks Report, an annual poll of 1,200 government, business and civil society professionals compiled by the Geneva-based foundation, suggests there will be little respite as countries grapple with “energy, inflation, food and security crises”.
Almost seven in 10 respondents believe the near term will be characterised by volatile economies and multiple shocks, while a fifth fear “catastrophic outcomes” within a decade.
The most immediate risk is the cost of living crisis, while the biggest long-term threats remain climate-related, the survey found. Saadia Zahidi, the WEF's MD, is concerned that the world might be entering a “vicious cycle”.
“Very few leaders in today’s generation have been through these kinds of traditional risks around food and energy, while battling what’s coming up in terms of debt, what’s coming up in terms of climate,” she said.
“We’re going to need a sort of new type of leadership that is much more agile.”
This week, the WEF holds its annual meetings in Davos, Switzerland, where the business, political and academic elite will share insights and start framing plans for the year ahead.
The gathering begins at a time when inflation is at a four-decade high across many advanced economies.
The report calls for global co-operation and warns that if governments mishandle the crisis they “risk creating societal distress at an unprecedented level, as investments in health, education and economic development disappear, further eroding social cohesion”.
— Bloomberg
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