Geo-Economic Confrontation Tops Global Risks for 2026, Says WEF Report

The annual risk assessment, drawing on more than 1,300 global leaders and experts, shows that geo-economic confrontation, the use of economic tools such as sanctions, tariffs and investment controls as instruments of geopolitical rivalry, has climbed eight places to become the top risk on the two-year horizon. It warns that such a confrontation could disrupt supply chains and global economic stability.

Key findings of the report include a marked surge in short-term economic risks, with economic downturn and inflation both rising sharply in the rankings and asset bubble risk also moving up. State-based armed conflict remains severe, holding the second-highest risk position for 2026 before settling lower on the two-year outlook.

The report highlights societal fragmentation, including polarisation and misinformation and disinformation, as severe near-term threats. Anxiety over artificial intelligence outcomes rose substantially, moving into the top risks on the long-term horizon due to concerns about labour markets, social disruption, and security implications.

Environmental risks, such as extreme weather and biodiversity loss, declined in relative importance on the two-year risk scale amid pressing economic and geopolitical concerns, though they remain dominant over a ten-year timeframe, it said.

The report also notes that only half of respondents expect a turbulent or stormy global outlook for the next two years, marking a heightened level of pessimism compared with the previous year, with 68 per cent forecasting a multipolar or fragmented world order over the decade.

President and CEO, World Economic Forum, Børge Brende emphasised that a new competitive order is taking shape and urged leaders to use dialogue and cooperation to build resilience and address emerging risks.

"A new competitive order is taking shape as major powers seek to secure their spheres of interest. This shifting landscape, where cooperation looks markedly different than it did yesterday, reflects a pragmatic reality: collaborative approaches and the spirit of dialogue remain essential," noted Børge Brende,

The Global Risks Report is published ahead of the World Economic Forum's 56th Annual Meeting in Davos, scheduled for later this month, where political and business leaders will gather to discuss ways to mitigate the highlighted risks.

- ANI