Global Risk Indexes (25-01-2025)

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

Graham Westcott

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

Trade Wars, Energy Alliances, and Capital Flight Define a Multipolar Economic Crisis

The global economy is being reshaped by intensifying protectionism and geopolitical rivalries. U.S. President Donald Trump's tariff proposals on imports from Canada, Mexico, and China have compounded supply chain disruptions and heightened inflationary risks. These measures have forced multinational corporations in critical sectors, such as automotive and technology, to explore costly operational shifts. Simultaneously, retaliatory measures by key trading partners are exacerbating global trade fragmentation, amplifying uncertainty in markets already struggling with inflation and weak consumer sentiment.

Energy markets remain volatile amidst shifting alliances and production adjustments. Trump's pressure on OPEC to lower oil prices, coupled with speculation about easing U.S. sanctions on Russian crude exports, has created significant market uncertainty. While Brent crude dipped below $80 per barrel, global energy markets remain strained by ongoing disruptions in the Red Sea and fragile production increases in Libya. Saudi Arabia's $1 trillion investment pledge and efforts to deepen ties with the U.S. underscore its strategic pivot towards securing geopolitical influence amid shifting global energy dynamics.

China's economic strategy reflects its resilience and ambitions amid structural vulnerabilities. Beijing's suspension of Brazilian soybean imports, coupled with its revitalization of the Belt and Road Initiative, underscores its push to diversify trade relationships and mitigate external dependencies. However, China's demographic decline and ongoing property sector challenges remain significant headwinds. The rise in domestic consumption during the Lunar New Year has provided short-term relief but does little to offset long-term economic vulnerabilities.

Fiscal pressures and capital flight are straining emerging markets. Capital outflows from non-China emerging economies, driven by higher U.S. interest rates and protectionist policies, signal a looming liquidity crisis. Brazil and South Africa are particularly exposed, with fiscal imbalances exacerbating vulnerabilities. Meanwhile, Argentina's modest economic recovery highlights the tenuous balance between growth and fiscal discipline in resource-dependent economies. These developments underscore the systemic risks faced by emerging markets as global capital seeks safer havens.

Technological decoupling accelerates as geopolitical tensions deepen. The fragmentation of global technology supply chains, exemplified by Taiwan's production shifts away from China, highlights the long-term economic and industrial implications of geopolitical rivalries. Simultaneously, increased investments in AI and advanced technologies across Asia reflect the growing importance of innovation in defining competitive advantage and global influence in the coming decades.

Strategic adaptation is essential to navigating systemic risks and opportunities. Policymakers must prioritize fostering multilateral cooperation to stabilize trade flows, securing critical resources to mitigate supply chain disruptions, and addressing demographic and fiscal imbalances. For investors, opportunities lie in renewable energy, critical minerals, and advanced technology sectors, which align with structural shifts in the global economy. Proactive engagement and forward-looking strategies will be critical for navigating this multipolar and volatile world order.

Geopolitical Risk Assessment for the Global Markets
(25-01-2025)

The global economy is entrenched in a period of heightened instability, shaped by escalating trade disputes, energy market disruptions, and strategic realignments. Short-term challenges are dominated by inflationary pressures, capital flight, and supply chain realignments, while long-term risks revolve around technological decoupling, demographic challenges, and geopolitical fragmentation. Policymakers and investors must navigate this turbulent landscape by leveraging strategic foresight and fostering collaboration to mitigate systemic risks.

Geopolitical Risk Index

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

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