BMI Publishes New Special Report, ‘Hidden Risks To The Global Economy’
Most of the main risks to global economic and geopolitical stability are well known. These are typically a double-dip recession in the United States; the collapse of the eurozone; a ‘hard landing’ in China; and a war involving the US and its allies against Iran. However, there are plenty of other risks that, while not necessarily ‘global’ in scope, have the ability to destabilise their regions. This in turn would have negative consequences for business and investment and add to the sense of a dangerous world. In our latest special report, ‘Hidden Risks To The Global Economy’, published today, we outline 12 such risks.
When we say ‘hidden risks’, we do not mean ‘black swan’ or completely unpredictable events. Such risks could include a new mass-casualty Islamist terror attack against a major city; a large-scale natural disaster such as a flood or volcanic eruption affecting a key economic region; and the sudden emergence of a new pandemic that disrupts global travel and trade. These are all certainly plausible risks, but they are events whose probability or timing simply cannot be estimated with any degree of confidence. Our list of hidden risks also excludes events such as a geopolitical crisis on the Korean Peninsula or in the South China Sea; a large European state quitting the eurozone; or Western intervention in Syria; because these are all widely recognised, in our view.
Rather, the hidden risks we identify are all developments which, while not necessarily unknown, are sufficiently ‘under the radar’ to most business decision-makers or under-reported by the mainstream media that if they were to escalate, would make investors say ‘I wish I’d known about this earlier’. Our selection of risks was also determined by our belief that each could play out over the next 12-15 months, rather than an indefinite timeframe spanning many years.
For each risk, we identify the warning signals of a potential crisis, the triggers for an escalation, and the key issues at stake for global business.