A photograph shows a sign at the Congress Center on the opening day of the World Economic Forum’s annual meeting in Davos, Switzerland, January 16, 2023.
Fabrice Cofrini | AFP | Getty Images
Global power rivalries and strategic standoffs top the list of the most serious near-term risks through 2026, according to the World Economic Forum’s Global Risks report released Wednesday.
Half of business and other executives surveyed said they expected turbulence over the next two years, and only 1% said they expected calm, according to the report. The resulting image is that of a world “sitting on the edge of a precipice.”
The report, which surveyed 1,300 leaders of governments, businesses and other organizations, describes a changing landscape in which “geoeconomic confrontation” takes the top spot on the list of business concerns over the next two years – fueled by increasing competition and the weaponization of economic tools such as tariffs, regulations, supply chains and capital constraints. The report warns that this could lead to a substantial contraction in global trade.
“It’s basically about state armed conflicts and the concerns that come with that. So overall, almost a third of our respondents are very concerned in 2026 about what that means for the global economy and essentially the state of the world,” WEF Executive Director Saadia Zahidi said Wednesday, speaking to CNBC’s “Squawk Box Europe.”
Concerns about economic risks over the next two years saw the largest increase among all risk categories studied by the WEF, according to the report.
“Concerns [are] growing due to an economic slowdown, rising inflation and possible asset bubbles as countries face heavy debt burdens and volatile markets,” Zahidi wrote in the report.
The world’s largest insurance brokerage company, Marsh – which rebranded itself as Marsh McLennan on Wednesday – is partnering with the WEF on global risks.
“Today is not a moment of great global crisis, it is a moment of poly-crises,” Marsh CEO John Doyle told CNBC in an exclusive interview.
Doyle cited trade wars, culture wars, rapid technological revolution and the impact of extreme weather among current obstacles to business.
“It’s a lot for businesses to deal with and deal with,” he said.
Misinformation and misinformation come second on the WEF’s list of short-term risks, followed by societal polarization – or the widening of gaps between sharply opposed groups of people. Inequality is identified as the biggest interconnected risk over the next 10 years.
All of this creates obstacles to the kind of cooperation needed to deal with economic shocks, the report concludes.
The issue that grew larger and faster than any other in the survey was the potential for negative effects of artificial intelligence, rising from 30th place among short-term risks last year to fifth place among long-term risks in the most recent ranking.
Labor displacement, for example, could lead to a massive increase in income inequality, greater societal divisions, a contraction in consumer spending, and vicious cycles of economic contraction and social discontent amid massive productivity gains, according to the WEF report.
Machine learning and quantum computing are converging and their development is accelerating, the report notes, warning of a supercharged landscape that “may lead to situations in which humans lose control.”
While it is “very clear” that environmental risks have been “deprioritized” in the short term, according to Zahidi, extreme weather remains the top concern among executives surveyed for the next decade.
Global insured losses from natural disasters are estimated to reach $107 billion in 2025, surpassing $100 billion for the sixth consecutive year, a sharp increase from the early 2000s.
Doyle, Marsh’s CEO, said the California wildfires in early 2025 illustrate the need for regulation that would allow insurance rates to accurately reflect underlying risk in order to attract more capital into the insurance market.
“There are risk takers. There are investors and insurance companies who are willing to finance these risks,” Doyle said. “It’s also about ensuring that building codes are appropriate, that we learn from past events, and that technologies are deployed in a way that can effectively manage risk.”
The report warns: “Extreme heat, drought, wildfires and other extreme weather events are likely to become more intense and more frequent.”
Yet environmental risks such as “critical changes in Earth systems,” “biodiversity loss and ecosystem collapse” and pollution have fallen significantly on the risk list – reflecting a shift in what executives worry about most.
While leaders are “heavily distracted” by short-term concerns about “wars that don’t end” and other problems such as inflation and misinformation, lingering concerns about sustainability persist, Zahidi told CNBC. “This great looming existential risk around climate is still there. But our collective capacity and our shared minds… to act on it, that’s what’s been reduced,” she said.
The report concludes that “coalitions of the willing” are crucial and that collaborations between governments, academia, businesses and private citizens are essential to foster resilience and create viable solutions to the world’s greatest challenges.
But Zahidi said a “rollback of multilateralism” and a “new era of competition” raises many concerns, as risks such as climate change and future pandemics require cooperation. “Can we work together when we need to?” she told CNBC.