10 Global risks that could derail the world economic recovery

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As we move our way out of our Coronavirus Cocoons Australia’s economy, and in fact, the world economies, are looking positive for the years ahead.

Recently the Economist’s Intelligence Unit forecast that the post-pandemic recovery will continue in 2022, with global GDP expanding by 4.1%.

However, this rebound will mask great variations in the pace of recovery across different regions.

And being economists, you can understand, the EIU also tracks a host of scenarios that could derail the post-pandemic recovery they have forecast.

Global Risks

 

EIU’s top ten global risk scenarios

  1. Worsening US-China ties force a full decoupling in the global economy
  2. An unexpectedly fast monetary tightening leads to a US stockmarket crash
  3. A property crash in China leads to a sharp economic slowdown
  4. Tighter domestic and global financial conditions derail the recovery in emerging markets
  5. New Covid-19 variants emerge that prove resistant to vaccines
  6. Widespread social unrest weighs on the global recovery
  7. Conflict erupts between China and Taiwan, forcing the US to intervene
  8. EU-China ties worsen significantly
  9.  Severe droughts prompt a famine
  10. An inter-state cyberwar cripples state infrastructure in major economies

How worried should you be?

EIU tracks global and country-level risks that could derail their core forecasts.

They track these risks and score them in terms of probability (how likely are they to happen?) and impact (if they happen, how great is the impact on businesses?).

They combine these probability and impact scores to produce an intensity rating.

Below is a snapshot of scores for our ten global risk scenarios.

Risk report

Read the full report from the Economist Intelligence Unit here

ALSO READ: The 25 Richest Countries in the World – Here’s Where Australia Sits [Infographic]

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About

Kate Forbes is a National Director Property Strategy at Metropole. She has 15 years of investment experience in financial markets in two continents, is qualified in multiple disciplines and is also a chartered financial analyst (CFA).
Visit Metropole Melbourne


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