Cost-of-living crisis biggest global risk: study

LONDON: The cost-of-living crisis is the biggest global risk over the next two years, the World Economic Forum warned on Wednesday in a survey preceding its annual Davos meetings of global elites.

The WEF report described the cost-of-living crisis as the “biggest short-term risk” between now and 2025, followed by natural disasters, extreme weather events and “geo-economic confrontation”.

Global inflation remains at sky-high levels after energy and food costs rocketed last year, largely owing to the invasion of agricultural powerhouse Ukraine by major oil and gas producer Russia.

Supply constraints caused by the Covid pandemic have also contributed to decades-high prices for consumers. “Conflict and geo-economic tensions have triggered a series of deeply interconnected global risks,” said the annual study ahead of next week´s gathering in the Swiss Alpine village of Davos.

“These include energy and food supply crunches, which are likely to persist for the next two years, and strong increases in the cost-of-living and debt servicing,” it added. The report said such “crises risk undermining efforts to tackle longer-term risks, notably those related to climate change, biodiversity and investment in human capital”.

The survey, produced with the consulting firm Marsh McLennan and Zurich Insurance Group, took into account the views of more than 1,200 global risk experts, policymakers and industry leaders.

“Those that are already the most vulnerable are suffering -- and in the face of multiple crises, those who qualify as vulnerable are rapidly expanding, in rich and poor countries,” she wrote in the report.

At a London press conference on Wednesday, Zahidi highlighted the fact that respondents to the survey were placing traditional warfare as less of a risk than geo-economic conflict -- such as sanctions, punitive tariffs and other forms of trade war -- or cyber warfare.