WEF: Global economies ‘balancing on a precipice’ as geoeconomic risks climb
The World Economic Forum’s Global Risks 2026 report names geoeconomic confrontation the top near-term threat, with trade, tariffs and technology policies shaping personal and business risk.
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By Torontoer Staff
The World Economic Forum’s Global Risks 2026 report warns that global economies are “balancing on a precipice,” with geoeconomic confrontation ranked the top risk for 2026 and the next two years. The finding comes as world leaders gather in Davos this week to discuss security, trade and economic policy.
The WEF’s survey of roughly 1,300 experts in academia, business, government, international organisations and civil society put geoeconomic confrontation ahead of other risks after it rose several places in the rankings from 2025.
What the WEF found
Eighteen per cent of survey participants named geoeconomic confrontation the top risk in 2026 for triggering a material global crisis, up from the third most likely risk in 2025. For the two-year outlook through 2028, respondents also ranked that theme highest, placing it eight spots higher than in last year’s survey.
As we enter 2026, the world is balancing on a precipice. The turmoil caused by kinetic wars alongside deployment of economic weapons for strategic advantage is continuing to fragment societies.
World Economic Forum, Global Risks 2026 report
The report defines a global risk as “the possibility of the occurrence of an event or condition that, if it occurs, would negatively impact a significant proportion of global GDP, population or natural resources.” It highlights how trade, finance and technology are increasingly being used as tools of influence, and how that dynamic can deepen rivalries and unsettle supply chains.
How geoeconomic confrontation is showing up
Geoeconomic confrontation refers to states using economic levers, such as tariffs, sanctions, export controls and investment restrictions, to pursue strategic goals. The WEF singled out the United States and China as closely watched examples of major powers deploying such measures to support national security aims.
The report also points to rising tariff policies and trade tensions as concrete manifestations of this risk. Recent public disputes over tariffs, trade deals and access to technology markets have contributed to the sense that economics and geopolitics are merging into a single domain of competition.
Other risks on the list
State-based armed conflict ranked second in the survey, with 14 per cent of respondents naming it the top near-term threat. The WEF noted ongoing conflicts and regional tensions as contributing factors to that assessment.
Other concerns cited by respondents included extreme weather events (eight per cent), societal polarisation (seven per cent), misinformation and disinformation (seven per cent), economic downturn (five per cent) and erosion of human rights and civic freedoms (four per cent).
Practical implications for everyday life and planning
The WEF’s findings matter beyond policy debates. Geoeconomic friction changes how goods move, how companies invest and how governments manage access to technology and capital. That creates knock-on effects for jobs, prices and long-term financial planning.
- Expect more volatility in markets tied to trade-sensitive sectors, such as autos, semiconductors and energy.
- Businesses that rely on global supply chains should review contingency plans and diversification options.
- Consider the security of retirement and investment portfolios, especially exposure to markets vulnerable to sanctions or sudden trade restrictions.
- Plan for higher and uneven costs for imported goods, and build flexibility into household budgets.
- Keep informed about travel advisories and cross-border service disruptions that can affect work and leisure.
Rules and institutions that have long underpinned stability are under siege in a new era in which trade, finance and technology are wielded as weapons of influence.
World Economic Forum, Global Risks 2026 report
For consumers and professionals, the immediate takeaway is to translate geopolitical risk into practical steps: review exposure, update plans and stay current on policy shifts that can change costs or access to goods and services.
The WEF survey was conducted from August through September 2025. Results will frame discussions in Davos this year as leaders consider how to rebalance economic competition, protect critical infrastructure and reduce the chance that economic tools escalate into broader crises.
Global risks are not abstract. They influence prices, jobs and everyday choices. Planning with an eye to supply chains, investment diversification and the policy environment can help households and businesses navigate a more contested global economy.
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