Syllabus: GS3/ Economy
In News
- The World Economic Forum (WEF) released the 21st edition of the Global Risks Report (2026), warning that geoeconomic confrontations pose the biggest risk to major powers.
Global Risks for 2026
- Geoeconomic Confrontation: Rated as the top risk for 2026. This includes the “weaponization” of trade, finance, and technology through sanctions and tariffs (such as the US tariffs imposed by the US, banning critical minerals by China etc).
- State-Based Armed Conflict: This is the second highest risk, fueled by ongoing wars like the conflict in Ukraine and recent volatility in regions like Venezuela and the Middle East.
- Extreme Weather: While environmental risks remain the top priority for the next decade, they have slipped to third place (8%) in the immediate two-year outlook due to the urgency of economic and military conflicts.
- Societal Risks: Polarization, misinformation, and AI-generated deepfakes are cited as major threats to social stability, especially during election cycles.
Biggest Risks to India
- Cybersecurity: This is ranked as the top risk for India and India is going more towards digital payments.
- Wealth Inequality and Social Safety Nets: Lack of robust social welfare schemes combined with rising income inequality poses a significant threat to internal stability.
- Economic External Shocks: India is susceptible to domestic slowdowns caused by global supply chain disruptions and international tariffs.
- Critical Infrastructure & Resource Security: The report highlights “water security” as a potential flashpoint, specifically noting that the Indus River Basin remains a point of contention between India and Pakistan, especially following the suspension of the Indus Waters Treaty.
Implications
- Fragmentation of global trade, disruption of supply chains, higher inflation and growth slowdown, social unrest & reduced trust in multilateralism.
Source: Firstpost
