Natural disasters and extreme weather events rank high on short and long-term risks

The World Economic Forum has published the 2023 Global Risks Report which outlines the top global risks ranked by severity over the short and long term.  

The Global Risks Perception Survey (GRPS) has underpinned the Global Risks Report for nearly two decades and is the World Economic Forum’s premier source of original global risks data. This year’s GRPS has brought together leading insights on the evolving global risks landscape from over 1,200 experts across academia, business, government, the international community and civil society. 

The report outlined the top 10 global risks, ranked by severity, over a two-year period and a 10-year period as depicted below.  

The key findings of the report included: 

• Cost of living dominates global risks in the next two years while climate action failure dominates the next decade. 

The next decade will be characterised by environmental and societal crises, driven by underlying geopolitical and economic trends. “Cost-of-living crisis” is ranked as the most severe global risk over the next two years, peaking in the short term. “Biodiversity loss and ecosystem collapse” is viewed as one of the fastest deteriorating global risks over the next decade, and all six environmental risks feature in the top 10 risks over the next 10 years. 

• As an economic era ends, the next will bring more risks of stagnation, divergence and distress. 

The economic after effects of COVID-19 and the war in Ukraine have ushered in skyrocketing inflation, a rapid normalization of monetary policies and started a low-growth, low-investment era. Governments and central banks could face stubborn inflationary pressures over the next two years, not least given the potential for a prolonged war in Ukraine, continued bottlenecks from a lingering pandemic, and economic warfare spurring supply chain decoupling. 

• Geopolitical fragmentation will drive geoeconomic warfare and heighten the risk of multi-domain conflicts. 

Economic warfare is becoming the norm, with increasing clashes between global powers and state intervention in markets over the next two years. 

• Technology will exacerbate inequalities while risks from cybersecurity will remain a constant concern.
  The technology sector will be among the central targets of stronger industrial policies and enhanced state intervention. Spurred by state aid and military expenditure, as well as private investment, research and development into emerging technologies will continue at pace over the next decade, yielding advancements in AI, quantum computing and biotechnology, among other technologies. 

• Climate mitigation and climate adaptation efforts are set up for a risky trade-off, while nature collapses
  Climate and environmental risks are the core focus of global risks perceptions over the next decade – and are the risks for which we are seen to be the least prepared. The lack of deep, concerted progress on climate targets has exposed the divergence between what is scientifically necessary to achieve net zero and what is politically feasible. Growing demands on public-and private-sector resources from other crises will reduce the speed and scale of mitigation efforts over the next two years, alongside insufficient progress towards the adaptation support required for those communities and countries increasingly affected by the impacts of climate change.