WEF warning: geopolitical tensions and extreme weather threaten global stability in 2025
The global risk landscape for 2025 has darkened, with state-based armed conflict and extreme weather key risks to global stability dominating the World Economic Forum’s (WEF) Global Risks Report released on Wednesday.
While economic risks have less immediate prominence in this year’s survey results, they remain a concern, interconnected with societal and geopolitical tensions.
The report, which captures insights from over 900 experts, who gave a bleak outlook, indicated that as we enter 2025 the global outlook is is increasingly fractured across geopolitical, environmental, societal, economic, and technological domains. Local experts have agreed with these findings.
Saadia Zahidi, the managing director of the WEF, writes in the report’s preface, "Today, geopolitical risk – and specifically the perception that conflicts could worsen or spread – tops the list of immediate-term concerns. Fear and uncertainty cloud the outlook in various parts of the world, including in Ukraine, the Middle East, and Sudan, with multilateral institutions struggling to provide effective mediation and work towards resolutions.“
Optimism is limited as the danger of miscalculation or misjudgement by political and military actors is increasingly high.
The report notes: “We seem to be living in one of the most divided times since the Cold War, and this is reflected in the results of the GRPS, which reveal a bleak outlook across all three time horizons – current, short-term, and long-term.”
A majority of respondents (52%) anticipate an unsettled global outlook over the short term (next two years), a similar proportion to last year. “Another 31% expect turbulence and 5% a stormy outlook. Adding together these three categories of responses shows a combined four percentage point increase from last year, indicating a heightened pessimistic outlook for the world to 2027.”
State-based armed conflict, now ranked as the number one current risk by 23% of respondents, exists in a world that has seen an increasing number of armed conflicts over the last decade. The risk of further destabilising consequences following Russia’s invasion of Ukraine, as well as in the Middle East and in Sudan, are likely to be amplifying respondents’ concerns beyond 2025 as well.
The impacts of environmental risks have worsened in intensity and frequency since the Global Risks Report was launched in 2006, the report noted.
“Extreme weather events are anticipated to become even more of a concern than they already are, with this risk being top-ranked in the 10-year risk list for the second year running. Biodiversity loss and ecosystem collapse ranks number two over the 10-year horizon, with a significant deterioration compared to its two-year ranking,” says the report.
Peter Giger, the group chief risk officer at Zurich Insurance Group, said with the planet surpassing the 1.5°C warming threshold in 2024 for the first time, the stakes are sky-high.
Spiros Fatouros, the CEO of Marsh Africa and South Africa, said there is a growing sense of societal fragmentation, especially in developing regions, driven by the impact of the cost-of-living crisis since 2022. “This has contributed to inequality becoming the top interconnected risk this year. This is especially true for African countries that have increasingly been faced with an economic downturn, skyrocketing inflation, and overindebted households.”
Professor Raymond Parsons, an economist at the North-West University (NWU) Business School, said the Global Risk survey confirms that, as the world enters 2025, political and business leaders everywhere are being confronted with increasingly complex global risks.
“These risks are now being compounded by deepening geopolitical and geo-economic tensions. And still to come will also be the wider global implications of the economic and tariff agenda to be implemented soon by incoming US President Donald Trump,” he added.
Parsons added that the overall impact of these developments is one of less optimism about the global outlook, failing adequate remedial steps.
“Smart risk management is now needed by both governments and business. For South Africa’s small open economy to handle such additional risks, therefore, requires implementing policies that are growth-friendly, strengthen its economic buffers, and build economic resilience, ” he said.
BUSINESS REPORT