World Economic Forum Report: Geoeconomic Confrontation Identified as Top Global Risk for 2026
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The World Economic Forum (WEF) has released the Global Risks Report 2026, highlighting a world “balancing on a precipice” where strategic competition and the retreat of multilateralism define the global outlook. Over the next two years, geoeconomic confrontation is identified as the most severe risk, surpassing state-based armed conflict. This shift reflects a new era where trade, finance, and technology are increasingly wielded as “weapons of influence”. While 50% of experts anticipate a turbulent or stormy outlook in the short term, this pessimism deepens to 57% over a ten-year horizon.
Compounding Risks and Emerging Threats
Technological Volatility: Misinformation and disinformation remain a top short-term concern, while the “Adverse outcomes of AI” is the risk showing the sharpest increase in severity ranking between the short and long term.
Economic Reckoning: Risks of economic downturn, inflation, and asset bubble bursts have seen the largest ranking increases, fueled by high debt burdens and geoeconomic fragmentation.
Environmental Deprioritization: Despite being the top long-term priority, environmental concerns like extreme weather are being “reprioritized downward” in the immediate two-year timeframe due to pressing geopolitical and economic shocks.
Infrastructure Vulnerability: Ageing legacy infrastructure is increasingly endangered by frequent extreme weather events and could become a new front in hybrid warfare.
Global Outlook and Cooperative Fragility
Multipolar Fragmented Order: 68% of respondents expect a world in 2036 where middle and great powers contest and enforce regional rules, with only 6% expecting a reinvigoration of the US-led international order.
Interconnected Inequality: Inequality remains the most interconnected global risk, acting as a catalyst for societal polarization and the breakdown of the social contract.
What is ‘Geoeconomic Confrontation’ and why has it become the primary global risk? It refers to the deployment of economic levers—such as sanctions, tariffs, investment screening, and the weaponization of supply chains—by powers to reshape international interactions and build self-sufficiency while constraining rivals. It has overtaken direct military conflict as the top risk because it represents a systemic shift away from the rules-based trade order of the last 80 years. By marginalizing institutions like the WTO, this trend creates a “vicious cycle” where governments take hostile trade actions because they feel the international system can no longer protect their interests, leading to permanent decoupling between economic blocs.
Policy Relevance
The report underscores that India must navigate a “geopolitical recession” by building strategic autonomy and local resilience against cascading global shocks.
Strategic Impact for India:
Mitigating Cyber Insecurity: Identified as the #1 threat to India by domestic business leaders, cybersecurity must be integrated into Digital Public Infrastructure (DPI) to protect against sophisticated global attacks.
Addressing Inequality and Polarization: Since inequality is the most interconnected risk globally, Indian policy must focus on inclusive growth and social mobility to prevent the “streets versus elites” narratives seen in neighboring regions.
Strategic Resource Management: As geoeconomic tools target rare earths and tech ecosystems, India’s focus on Critical Mineral Missions is vital for long-term industrial security.
Adaptive Climate Infrastructure: Highlighting India’s high vulnerability, policy must shift from reactive disaster response to climate-adaptive design for power grids and transport networks.
Follow the full news here: The Global Risks Report 2026