A report prepared for next week’s World Economic Forum in Davos, Switzerland, warned that energy and food prices could continue to soar over the next two years, undermining global efforts to fight poverty and the climate crisis.
The World Economic Forum’s annual Global Risks Report found the international cost of living crisis sparked by the Covid pandemic and Russia’s war in Ukraine topped the list of more than 1,200 global experts, policymakers and business leaders.
Alarm bells sounded on the eve of an annual gathering of world leaders in the Swiss mountain resort, which said crunches in energy and food supplies could persist for the next two years, posing the biggest risk to the world economy.
It highlighted how the pandemic and war in Europe had unleashed a series of interconnected global risks, saying its fallout could undermine cooperation among nations to tackle long-term problems, including the climate crisis, protecting biodiversity and reducing poverty. effort.
“These bring with them follow-on risks that will dominate the next two years: the risk of a recession; mounting debt distress; an ongoing cost of living crisis; disinformation and misinformation leading to social polarization; disruption to rapid climate action; and zero-sum geopolitical economic warfare,” the report said.
The World Economic Forum report, produced in collaboration with Marsh McLennan and Zurich Insurance Group, argues that the “window for action” on the most serious long-term threats is closing fast.
“Concerted collective action is required before risks reach critical mass,” it said. “Unless the world begins to cooperate more effectively in mitigating and adapting to climate change, this will lead to continued global warming and ecological collapse over the next 10 years.”
Inflation has soared in many countries around the world after the coronavirus dealt a blow to the global economy and Vladimir Putin’s invasion of Ukraine drove up wholesale energy costs and disrupted food supply chains.
A third of the world economy is expected to slip into recession by 2023, reflecting the fallout from war, lingering high inflation and higher borrowing costs for households, businesses and governments as major central banks push up interest rates.
Saadia Zahidi, Managing Director, World Economic Forum, said: “The short-term risk landscape is dominated by energy, food, debt and disaster. Those who are already the most vulnerable are suffering – and in the face of multiple crises, those who qualify as vulnerable are rapidly expanding , both in rich and poor countries.
“Climate and human development must be at the heart of global leaders’ concerns, even as they grapple with the current crisis. Cooperation is the only way forward.”