Geoeconomic concerns top Global Risk Report

This year's WEF report says that rules and institutions that have long underpinned stability are under siege in a new era in which trade, finance and technology are wielded as weapons of influence

VINCENT THIAN / AFP

Chinese President Xi Jinping (centre L) and Canada's Prime Minister Mark Carney (2nd R) attend a meeting at the Great Hall of the People in Beijing on 16 January 2026.

Geoeconomic concerns top Global Risk Report

Majalla

last update on 22 Jan 2026

The World Economic Forum's Global Risks Report 2026, published earlier this month, cited geoeconomic confrontation as a top risk for the year, with 18% of respondents viewing it as the risk most likely to trigger a global crisis in 2026, as well as being ranked 1st for severity over the next two years, up eight positions from last year. State-based armed conflict came in 2nd position for 2026, dropping to 5th position in the two-year timeframe.

Economic risks had the largest collective increase in the two-year outlook. Economic downturn and inflation risks both surged eight positions, to 11th and 21st, respectively, while the asset bubble burst rose seven to 18th. Mounting debt concerns and potential asset bubbles, amid geoeconomic tensions, could trigger a new phase of volatility.

Misinformation and disinformation rank 2nd on the two-year outlook, while cyber insecurity ranks 6th. Adverse outcomes of AI had the steepest climb, rising from 30th in the two-year horizon to 5th in the 10-year horizon, reflecting anxiety about their implications for labour markets, societies and security.

Societal polarisation ranked 4th in 2026 and 3rd by 2028. Inequality came in the 7th position in the two- and 10-year forecasts. Inequality was also cited as the most interconnected risk for a second consecutive year, fuelling other risks as social mobility stalls, while economic downturn was the second-most interlinked. These risks are grounded in concerns about cost-of-living pressures and the entrenchment of K-shaped economies.

The @wef's Global Risks Report 2026 finds the world in an "age of competition", marked by complexity and confrontation.
Both the short and long-term outlooks of leaders and risk experts predict "turbulent" to "stormy" times. Geoeconomic confrontation, mis- and disinformation and... pic.twitter.com/hm5wMY40fW
— World Economic Forum (@wef) January 14, 2026

“As we enter 2026, the world is balancing on a precipice. The turmoil caused by kinetic wars alongside deployment of economic weapons for strategic advantage is continuing to fragment societies,” the WEF said in its Global Risks 2026 report.

“In a world already weakened by rising rivalries, unstable supply chains and prolonged conflicts at risk of regional spillover, such confrontation carries systemic, deliberate and far-reaching global consequences, increasing state fragility,” the report said.

“We highlighted the risk of geoeconomic tensions escalating, pointing to a specific set of risks around trade and tariffs, but also noting that these should be regarded as part of a broader divergence between West, East and South, albeit with many countries forging their own pathways and balancing relationships with the different sides.”

“Rules and institutions that have long underpinned stability are under siege in a new era in which trade, finance and technology are wielded as weapons of influence.”

The turmoil caused by kinetic wars alongside the deployment of economic weapons for strategic advantage is continuing to fragment societies

WEF Global Risks Report

The report came against the backdrop of an increasingly aggressive US foreign and economic policy under the second term of Donald Trump. In the short span of one year, the US president has ramped up his global trade war and sweeping tariff policies against countries around the world, including allies and foes alike, such as Canada and China.

The report's findings were also clearly on display at the World Economic Forum on Wednesday. In his 21 January speech at Davos, Trump threatened to increase tariffs on European nations for rejecting his repeated demands that Greenland become part of the US for "national security" interests, a move that Canadian Prime Minister Mark Carney described as "escalation." Trump later walked back his tariff threats, but that didn't stop the Canadian premier from boldly calling out the dangers of a world where might makes right.

In his now viral speech (It's worth reading the full transcript here), Carney didn't hold back. "The powerful have their power," he added later. "But we have something, too—the capacity to stop pretending, to name reality, to build our strength at home, and to act together. This is Canada's path. We choose it openly and confidently, and it is a path wide open to any country willing to take it with us."

Earlier this month, Carney turned heads when he took the bold step of signing a trade deal with China, positioning Canada as a potential leader in a new global trading order. At the time, he remarked that Canada's relationship with China had become "more predictable" than its relationship with the US under the Trump administration and that Ottawa was "recalibrating" its relationship with Beijing, "strategically, pragmatically, and decisively.

Circling back to the WEF report, it noted that the United States and China—the world's two most powerful economies—were being "most closely watched" when it comes to governments using "economic levers" to build national security on a global scale to advance their "geopolitical interests", which is why, Carney believes that progress made with China helps Canada prepare "for the new world order".

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