Top forecasters predict where this year’s economic and political risks will be and why they matter.
While the specter of the financial crisis still looms, countries are emerging from its wake and becoming part of an increasingly interconnected, dynamic political and economic environment. As the balance of global power changes within it, so do the risks that countries—and companies—face. In our second annual risk roundup, three prominent forecasters weigh in on the greatest issues affecting the global business and economic landscape in the year ahead.
As in 2010, the Economist Intelligence Unit’s economic outlook points to sovereign-debt risk in the eurozone (though in Spain this year rather than in Greece), as well as unpredictable ripple effects from austerity measures, rising bond yields, volatile commodities, and growing political tensions in (and with) China, Iran, North Korea, and even the United States.
A new, and hegemon-free, global order tops the Eurasia Group’s list of the greatest risks in 2011. The firm’s report also highlights fragmentation in the European Union, cybersecurity threats, internal struggles within Mexico and Pakistan, and the likely implementation of currency controls around the world.
The sixth edition of the World Economic Forum’s Global Risks report focuses on globalization’s disorders—economic disparities within and among countries, as well as a lack of global governance—which could lead to further fiscal and monetary instability, a rise in illegal economic activity, and resource shortages.