Dimming Outlook on Global Economy Could Fuel Social Unrest: World Economic Forum

By Tom Ozimek
Tom Ozimek
Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'
January 11, 2022 Updated: January 11, 2022

The latest risk perception survey from the World Economic Forum (WEF) shows that the vast majority of respondents were either concerned or worried about the outlook for the world, with the international agency warning that the lack of optimism threatens to fuel “a vicious cycle of disillusionment and social unrest.”

According to the Global Risks Perception Survey (GRPS), which is part of the WEF’s most recent Global Risks Report (pdf), a whopping 84 percent of respondents expressed pessimism about the world outlook, with 23 percent saying they’re “worried” and 61.2 percent saying they’re “concerned.” Just 3.7 percent said they’re “optimistic” and 12.1 percent expressed a “positive” view about where the world is heading in the near future.

At the same time, just 10.7 percent saw a positive scenario materializing over the next three years in the form of the global economic recovery accelerating. The remainder expect negative outcomes, including 41.8 percent anticipating consistent volatility with “multiple surprises” and 10.1 percent predicting “progressive tipping points with increasing catastrophic outcomes.”

The findings build on last year’s edition of the Global Risks Report, which warned of potential risks that Saadia Zahidi, WEF managing director, said have now become “clear and present dangers.”

“Supply chain disruptions, inflation, debt, labour market gaps, protectionism and educational disparities are moving the world economy into choppy waters,” Zahidi said in the report, which highlighted a near 30 percent rise in commodity prices since the end of 2020, with further volatility possible due to ongoing supply chain disruptions as well as dislocations due to disinvestment in fossil fuel reserves.

Surging inflation is expected dampen consumer sentiment and weaken consumption, hitting small and medium enterprises particularly hard, according to the report, which identified four key areas of emerging risk.

“These difficulties are impeding the visibility of emerging challenges, which include climate transition disorder, increased cyber vulnerabilities, greater barriers to international mobility, and crowding and competition in space,” Zahidi added.

The report is published annually ahead of the annual WEF meeting in Davos, Switzerland. Last month, the Geneva-based WEF postponed the January event until mid-2022 due to the spread of Omicron.

“Current pandemic conditions make it extremely difficult to deliver a global in-person meeting,” according to Adrian Monck, WEF Managing Director of Public Engagement. “Despite the meeting’s stringent health protocols, the transmissibility of Omicron and its impact on travel and mobility have made deferral necessary.”

In the United States, Omicron has overtaken Delta as the dominant strain of the CCP (Chinese Communist Party) virus, also known as SARS-CoV-2, the pathogen that causes COVID-19.

While less severe, the sheer number of infections caused by Omicron could strain hospital systems, some experts have warned. On Monday, there were a record 132,646 COVID-19 hospitalizations in the United States, a figure that displaced the prior all-time high of 132,051 hit in January 2021, according to a Reuters tally.

However, states that have started separating out incidental COVID-19 hospitalizations have found that many COVID-19 patients were admitted for other reasons.

Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'