Global Risk Indexes (24-01-2025)

Global 96 (0 —)
MENA 94 (-1 ▼)
APAC 95 (-1 ▼)
Europe 98 (+1 ▲)
Africa 95 (+2 ▲)
AMERs 95 (-2 ▼)
Markets 97 ( —)
Graham Westcott, Global Markets region analyst at Worldwise Analytica

Graham Westcott

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

Trade Wars, Energy Market Instability, and Economic Fragmentation Challenge Global Stability

Escalating trade tensions dominate the global economic landscape. U.S. President Donald Trump's aggressive push for tariffs on imports from China, Canada, and Mexico has heightened supply chain disruptions and inflationary pressures. Industries such as automotive and aluminum are bracing for substantial cost increases, with multinationals like Alcoa exploring major logistical shifts to circumvent punitive duties. European and Asian markets are responding with caution, reflecting fears of retaliatory measures and trade realignments.

Energy markets remain volatile amidst geopolitical realignments. Trump's calls for OPEC to lower oil prices to undercut Russia's war economy have intensified pressures on global crude markets. While Brent and WTI prices have declined marginally, the market remains oversupplied due to U.S. domestic production surges and strategic energy rollbacks. Meanwhile, Saudi Arabia's deepened economic ties with the U.S., alongside its Crown Prince's $1 trillion investment pledge, underscore the kingdom's bid to consolidate its geopolitical leverage.

China's economic pivot reflects resilience amid structural challenges. As the Lunar New Year approaches, increased domestic travel and consumption provide short-term economic relief. However, concerns over demographic decline and a slowing property sector persist. Beijing's suspension of Brazilian soybean imports amid trade diversification efforts underscores its strategic focus on mitigating external dependencies while reviving its Belt and Road Initiative to expand global influence.

Emerging markets grapple with capital flight and fiscal constraints. Capital outflows from non-China emerging markets, driven by higher U.S. interest rates and Trump's policies, signal a looming 'sudden stop' scenario. Countries such as Brazil and South Africa are particularly vulnerable, with fiscal imbalances and elevated debt levels compounding external pressures. Argentina, however, offers a glimmer of hope with its modest economic rebound, albeit overshadowed by austerity-driven public discontent.

Technological decoupling accelerates as global supply chains realign. Taiwan's efforts to shift production away from China highlight the broader fragmentation of global tech ecosystems. Meanwhile, significant AI-driven investment in Asia signals a new competitive frontier, with companies leveraging advancements to secure industrial advantages. These shifts underscore the growing interplay between technological innovation and geopolitical rivalry.

Strategic adaptation is imperative for navigating systemic risks. Policymakers must prioritize energy security, trade diversification, and fiscal prudence while fostering multilateral cooperation to stabilize the global economy. Investors should focus on resilient sectors such as renewable energy, critical minerals, and advanced technologies, while monitoring geopolitical developments to identify emerging opportunities and risks.

Geopolitical Risk Assessment for the Global Markets
(24-01-2025)

The global economy is navigating profound turbulence as geopolitical tensions amplify risks across energy markets, trade dynamics, and fiscal stability. Short-term challenges are defined by escalating trade wars, volatile energy prices, and capital flight from emerging markets, while long-term issues include technological decoupling, resource competition, and demographic constraints. Policymakers and investors must adopt multifaceted strategies to mitigate risks and harness opportunities in this increasingly fragmented world order.

Geopolitical Risk Index

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

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