Global Risk Indexes (15-01-2025)

Global 96 (+1 ▲)
MENA 98 (-1 ▼)
APAC 98 (+1 ▲)
Europe 98 (+1 ▲)
Africa 90 (+3 ▲)
AMERs 98 (+1 ▲)
Markets 94 (+3 ▲)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

Navigating Global Intersections: Where Trade, Finance, Energy and Geopolitics Converge

Geopolitical Fault Lines Deepen as Global Economies Wrestle with Structural and Strategic Realignments

The convergence of geopolitical shifts and economic vulnerabilities is reshaping the global financial order, with technology, energy, and trade at the forefront of transformation. Structural weaknesses in key economies like Germany and South Korea underscore the fragility of global growth as rising inflationary pressures, supply chain disruptions, and political instability persist. Germany's prolonged recession highlights the repercussions of energy dependence and declining industrial competitiveness, exacerbated by global trade uncertainties and high energy costs.

China's evolving economic strategy further complicates the global landscape. Beijing's addition of U.S. companies to its \Unreliable Entity List\ and its intensified Belt and Road cooperation with Sri Lanka underscore its commitment to recalibrating international partnerships amid mounting U.S.-China tensions. These moves highlight China's ambition to cement its influence in critical regions while countering Western technological restrictions. The inclusion of Taiwan as a \tier one\ AI partner by the U.S. reflects a counter-strategy to reinforce alliances within the technology domain.

The energy sector remains a critical axis of economic and geopolitical maneuvering. Guyana's dramatic growth in oil exports and Europe's struggles with energy transition, particularly France's challenges in rejuvenating its nuclear fleet, underscore the shifting dynamics of energy security. The global reliance on fossil fuels persists, but diversification efforts like General Motors' agreement for synthetic graphite production illustrate the race to secure critical inputs for the clean energy transition.

Emerging markets face heightened fiscal and debt challenges. South Korea's capital outflows and rising import prices reflect the vulnerabilities of economies grappling with domestic political crises and currency depreciation. In Latin America, Argentina's disinflationary trajectory and debt restructuring signal potential pathways for recovery but underscore the fragility of relying on fiscal austerity amid high poverty rates.

Technological decoupling is accelerating amid U.S. and EU policy shifts. The European Commission's continued focus on regulating U.S. Big Tech, alongside the UAE's trade agreements emphasizing AI and logistics, reveals the strategic importance of digital infrastructure. Meanwhile, India's hyperspectral satellite launches signal an increasing competition for technological dominance in critical industries like agriculture and defense.

Strategic diversification and collaboration will be paramount in navigating these intertwined risks. Policymakers must prioritize building resilient supply chains, enhancing industrial competitiveness, and fostering multilateral cooperation to address shared challenges. For investors, the focus should remain on sectors like energy, technology, and critical minerals, which are poised to define the next phase of global economic realignments.

Geopolitical Risk Assessment for the Global Markets
(15-01-2025)

The global economic landscape is marked by increasing uncertainty as interlinked geopolitical and financial challenges amplify systemic risks. Key dynamics include China's intensified resource strategies, the implications of U.S. technological export controls, and structural vulnerabilities in major economies like Germany and South Korea. Simultaneously, energy transitions, emerging market debt restructuring, and technological decoupling are reshaping global trade and investment flows. The short-term outlook reflects significant volatility, particularly in energy and technology markets, while long-term risks center on the fragmentation of supply chains and geopolitical alliances.

Geopolitical Risk Index

Developments to Follow for the Global Markets (See All Global)

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