Global economy to worsen on rising geopolitical worries; wealth disparity key concern: Survey

London/New Delhi: Rising geopolitical and geoeconomic tensions are the most urgent risks the world faces in 2019, while worsening international relations are hindering a collective will to tackle these concerns, a new study said Wednesday.

The annual 'Global Risks Report' by Geneva-based World Economic Forum (WEF) also flagged massive incidents of data fraud and large-scale cyber attacks among the biggest risks in terms of likelihood, while it also listed increasing polarisation of societies and growing wealth disparity among key concerns.

The report, based on a survey of nearly 1,000 experts and decision-makers from across the world, said that nine out of ten respondents expect the economy to worsen due to rising geopolitical tensions.

The list of biggest risks by likelihood, is topped by extreme weather events such as floods and storms, followed by failure of climate-change mitigation and adaptation; major natural disasters like earthquake, tsunami, volcanic eruption and geomagnetic storms; massive incident of data fraud/theft; and large-scale cyberattacks.

The report, released by the WEF days ahead of its annual meeting in Swiss resort town of Davos to be attended by over 3,000 global leaders, said the top-five risks by impact facing the world are: weapons of mass destruction; failure of climate-change mitigation and adaptation; extreme weather events; water crises; and major natural disasters.

The top-five trends identified by the survey are changing climate; rising cyber dependency; increasing polarisation of societies; rising income and wealth disparity; and increasing national sentiment.

The WEF said a weakened international cooperation is damaging the collective will to tackle global risks.

As per the survey, rising geopolitical and geoeconomic tensions are the most urgent risk in 2019, with 90 per cent of experts saying they expect further economic confrontation between major powers in 2019.

Besides, a darkening economic outlook, in part caused by geopolitical tensions, looks set to further reduce the potential for international cooperation in 2019, it further said.

According to the WEF survey, environmental degradation is the long-term risk that defines our age, with four of the top five most impactful global risks in 2019 being related to climate.

Rapidly evolving cyber and technological threats are the most significant potential blind spots and the world is still not fully appreciating the vulnerability of networked societies, WEF said and also referred to reports about alleged data theft cases in India.

"Trade disputes worsened rapidly in 2018 and the report warns that growth in 2019 will be held back by continuing geoeconomic tensions, with 88 per cent of respondents expecting further erosion of multilateral trading rules and agreements," the report said.

If economic headwinds pose a threat to international cooperation, efforts will be further disrupted in 2019 by rising geopolitical tensions among major powers, according to the report.

The survey found 85 per cent of respondents saying they expect 2019 to involve increased risks of "political confrontations between major powers".

"With global trade and economic growth at risk in 2019, there is a more urgent need than ever to renew the architecture of international cooperation. We simply do not have the gunpowder to deal with the kind of slowdown that current dynamics might lead us towards.

"What we need now is coordinated, concerted action to sustain growth and to tackle the grave threats facing our world today," WEF President Borge Brende said.

In the survey's 10-year outlook, cyber-risks sustained the jump in prominence they registered in 2018, but environmental risks continue to dominate respondents' concerns beyond the short term.