The Strategist

WEF Global Risks Report: A Comprehensive Analysis and Outlook

The World Economic Forum (WEF) recently published "The Global Risks Report 2024" in collaboration with Marsh McLennan and Zurich Insurance Group. In our view, this report offers a comprehensive overview of global risks. 

Sebastian Petric, LGT Senior FX Strategist
Temps de lecture
10 minutes
Strategist WEF
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The "Global Risks Report" ranks risks according to their severity. Misinformation and disinformation represent the most significant short-term risks, and could potentially even impact elections, while extreme weather events and critical changes to the Earth's systems are the most pressing long-term concerns. The report underscores the importance of international cooperation in addressing these critical global issues.

Geopolitics has re-emerged as a primary concern

It is also noteworthy that one of the most significant short-term risks identified in the WEF report is interstate armed conflict. As highlighted in our recent "Outlook 2024", geopolitics has re-emerged as a primary concern on the international stage. The current global landscape is characterised by a significant degree of instability. Tensions have exposed vulnerabilities in crucial supply chains, prompting a heightened focus on resource security in the political sphere. As the WEF noted, for a while now, the balance of global politics has been strained. We are seeing conflicts flare up in various places, creating a fragile international environment where opposing views and uncertainty make it hard for countries to work together effectively.

Perfect environment for risks to grow

The events of 2022, notably Russia's aggressions against Ukraine, had a profound impact on global dynamics, setting a precedent for potential shifts in geopolitical dynamics. In 2023, the resurgence of conflicts in the Middle East further emphasized the influence of geopolitics. The situation creates a perfect environment for risks to grow, according to the WEF. This is especially true in societies and countries that have already been weakened in terms of institutional characteristics in the past few years. In this respect, the upcoming elections in the United States will be at the centre of attention this year.

Hence, the year 2024 is anticipated to be a pivotal year in many aspects. Notably, it is not just high-profile actions like Russia's strategies in Eastern Europe that will demand attention. Iran's intricate network of relationships, particularly its affiliations with groups such as Hamas, Hezbollah, and the Houthi movement, will further complicate the global geopolitical landscape. These issues highlighted in the Global Risks Report 2024 are reinforcing the theme of “decoupling”, which we have covered before. The implications are more uncertain strategic decisions when it comes to investment from companies, and risks around inflation and resource security.

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