Photo shows billboards installed at the Congress Center on the first day of the World Economic Forum Annual Meeting in Davos, Switzerland, January 16, 2023.
Fabrice Coffrini | AFP | Getty Images
Global power struggles and strategic conflicts top the list of the most serious short-term risks heading into 2026, according to the World Economic Forum’s Global Risks Report released Wednesday.
According to the report, half of business executives and other leaders surveyed said they expected turmoil over the next two years, while just 1% said they expected calm. The resulting photo is one of a world “sitting on a cliff.”
The report, which surveyed 1,300 leaders in government, business and other organizations, captures a changing landscape in which “geoeconomic conflicts” will rise to the top of business concerns over the next two years, driven by increased competition and the weaponization of economic tools such as tariffs, regulation, supply chains and capital constraints. The report warns that this could lead to a significant contraction in global trade.
“State-based armed conflict and the concerns surrounding it are huge. So, overall, nearly a third of respondents are very concerned about what 2026 means for the global economy and, essentially, the global situation,” WEF Managing Director Saadia Zahidi told CNBC’s “Squawk Box Europe” on Wednesday.
Concerns about economic risks over the next two years have risen the fastest of all risk categories in the WEF survey, the report said.
“Concerns [are] “Growing through economic downturns, rising inflation and potential asset bubbles, as countries face high debt burdens and volatile markets,” Zahidi said in the report.
The world’s largest insurance brokerage company, marsh The company, which was rebranded Wednesday from Marsh McLennan, is partnering with the WEF on global risks.
“Today is not a moment of great global crisis, but a moment of compound crisis,” Marsh CEO John Doyle told CNBC in an exclusive interview.
Mr Doyle cited trade wars, culture wars, rapid technological revolution and the effects of extreme weather events as current hurdles for business.
“There are a lot of things that businesses have to face and deal with,” he says.
Misinformation and disinformation ranks second on the WEF’s list of short-term risks, followed by social polarization, or widening disparities between bitterly opposed groups. Inequality is recognized as the most interconnected risk of the next decade.
All this hinders the cooperation needed to deal with economic shocks, the report concludes.
Rising faster than any other issue in the survey is the potential negative impact of artificial intelligence, rising from 30th place as a short-term risk last year to 5th place as a long-term risk in the latest rankings.
According to the WEF report, for example, labor migration, despite significant productivity gains, can significantly widen income inequality, widen social disparities, reduce consumer spending, and trigger a vicious cycle of economic contraction and social dissatisfaction.
The report notes that machine learning and quantum computing are converging and their development is accelerating, warning of overcharging situations that “could lead to situations in which humans lose control.”
Mr Zahidi said it was “very clear” that environmental risks had been “de-prioritized” in the short term, but extreme weather events remained a top concern among the leaders surveyed over the next decade.
Global insured losses from natural catastrophes are estimated to reach $107 billion in 2025, the sixth consecutive year of more than $100 billion and a significant increase even since the early 2000s.
Marsh CEO Doyle said the wildfires in California in early 2025 demonstrate the need for regulation that allows premium rates to accurately reflect underlying risks to attract more capital to the insurance market.
“There are people who take risks. There are investors and insurance companies who fund these risks,” Doyle said. “We are also ensuring that building codes are appropriate, that we have learned from past events and that technology is in place to enable us to manage risks effectively.”
“Heat waves, droughts, wildfires and other extreme weather events are likely to become more intense and frequent,” the report warned.
However, environmental risks such as “significant changes to the Earth system”, “biodiversity loss and ecosystem collapse” and pollution have moved significantly lower on the risk list, reflecting changes in what concerns leaders most.
Zahidi told CNBC that while leaders were “very preoccupied” with short-term concerns about other issues such as “endless wars”, inflation and misinformation, concerns about sustainability remained. “There remains a huge and pressing existential risk around climate change, but it can be mitigated by our collective capacity and mindshare to address it,” she said.
The report concludes that ‘coalitions of the willing’ are critical and collaboration between governments, academic institutions, businesses and the private sector is essential to fostering resilience and creating viable solutions to the world’s greatest challenges.
But Mr Zahidi said a “retreat from multilateralism” and a “new era of competition” were creating major concerns, as risks such as climate change and future pandemics required cooperation. “Can we work together when we need to?” she told CNBC.
