The world should prepare for a "turbulent" and "stormy" two years ahead as many countries clash over competing geo-economic interests, a World Economic Forum report has warned.
The prospect of geo-economic confrontation was the single greatest risk in a survey of more than 1,300 global leaders and experts from academia, business, government and international organisations.
The report was released ahead of the forum's flagship meeting in Davos next week and comes as US President Donald Trump's administration flexes its muscles against rivals big and small, from China to Greenland, and populist governments put their own countries first.
US tariffs have sparked several countries to seek their own alliances and individual trade deals, away from traditional global agreements and trading blocs.
Half of those surveyed by the WEF expect to face a turbulent world over the next two years, up 14 percentage points from last year. A further 40 per cent expect the two-year outlook to be unsettled at the very least. A mere 1 per cent believe the world will be calm.
The report also highlighted a surge in AI anxiety, while concerns about the environment declined in the face of more pressing issues.
A separate WEF report this week showed a sharp fragmentation of countries working together on topics from peace and security to health care, with trade deals one of the few areas of co-operation.
“A new competitive order is taking shape as major powers seek to secure their spheres of interest," said Borge Brende, president and chief executive of the WEF. "This shifting landscape, where co-operation looks markedly different than it did yesterday, reflects a pragmatic reality: collaborative approaches and the spirit of dialogue remain essential.”
The longer-term view is even more pessimistic. Over a 10-year period, 57 per cent of respondents expect a turbulent or stormy world, with just 10 per cent anticipating stability and 1 per cent expecting the world to be calm. The findings underline the sense that global uncertainty is no longer cyclical but structural.
Geo-economic confrontation jumped eight places compared with last year’s report. State-based armed conflict ranked second for 2026 but fell to fifth place in the two-year outlook, suggesting that, while wars remain a dominant concern, their economic spillovers are becoming more central.
The slew of conflicts in the Middle East, only temporarily abated by tentative ceasefires, and the crisis in Iran will be on the agenda when the forum begins next Monday.
The report warns that intensifying rivalries and prolonged conflicts threaten global supply chains and undermine economic stability. Nearly seven in 10 respondents – 68 per cent – expect the world to move towards a multipolar or fragmented order in the next decade, reinforcing the sense of a splintering global system.
The risks of an economic downturn and inflation both surged eight places in the two-year outlook, ranking 11th and 21st, respectively. Concerns about asset bubbles also rose sharply, climbing seven places to 18th. Mounting debt levels could usher in a new phase of market volatility, the report added.
Societal strife and environmental malaise
Technology-related risks are also climbing. Misinformation and disinformation ranked second in the two-year outlook, reflecting worries about their effect on trust, politics and social cohesion, while cyber insecurity ranked sixth.
Societal pressures remain a persistent theme. Societal polarisation ranked fourth for 2026 and third by 2028. Inequality was identified as the most interconnected risk for the second year running, amplifying other challenges as social mobility stalls and cost-of-living pressures persist.
“The Global Risks Report offers an early warning system as the age of competition compounds global risks – from geo-economic confrontation to unchecked technology to rising debt – and changes our collective capacity to address them. But none of these risks are a foregone conclusion,” said Saadia Zahidi, managing director of the WEF.
Environmental risks, while still dominant over the long term, slipped down the rankings in the short term as immediate geopolitical and economic concerns took precedence. Extreme weather fell from second to fourth in the two-year outlook, while pollution and biodiversity loss also declined.
But over a 10-year horizon, environmental threats remain the most severe, with extreme weather, biodiversity loss and critical changes to Earth systems occupying the top three positions.
