Compiling a list of the top 10 global risks to the economy in 2019, the Economist Intelligence Unit is forecasting a number of active threats that could lead to a lack of stability and security. The EIU believes that these risks will grow worse before there is a chance of them getting better.
Here are the 10 risks listed by the EUI:
- Recession from U.S. corporate debt burden
- Deceleration of the Chinese economy in trade wars with the US
- Deceleration of the European economy from Brexit
- Possibility of a broad-based emerging-market crisis due to the spread of contagion
- Shortage and increased price of oil
- Territorial disputes, especially territories in the South and East China Sea becoming hostile
- Possibility of internet data being crippled through cyber-attacks
- Major military confrontation, including in the Korean peninsula
- Chance of political gridlock due to the Brexit leading to a disorderly no-deal
- Italian banking crisis elevating and leading to political and financial instability
The EIU is a British business that serves as an advisory within the economist group through research and analysis. This group works to forecast economic features through monthly country reports, five-year country economic forecasts, country risk service reports, and industry reports.
Many of the risks listed by the EIU for 2019 involve current leaders that have gained political power through populist promotion, such as US President Trump, Brazil’s President Bolsonaro, Indonesian President Joko Widodo, and India Prime Minister Narendra Modi. The thought process is that populist leaders, such as these, generally display a tendency to promote nationalistic thinking and policies, which can lead to international tension. This tension impacts trade and globe harmony that can create a heavy burden on the economy of every nation involved. A clear example of this are the trade wars between China and the US.
Leaders are not the only significant risk to the economy though. The EIU believes that the deceleration of the Chinese economy, the rise in oil prices, Brexit negotiations, and regional wars are also risks that could have a high impact should they occur. These are examples of risks that are less likely to happen but should still be considered noteworthy in the big picture.
If these risks do occur, they will impact the world’s economy as opposed to just a small section. That being said, it should be clear that the more aware society is from leaders to citizens concerning these risks, the better chance everyone has of either stopping them or riding out the storm.
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