Global Industry Warns "Trade Frictions Pose Rising Risk This Year"

[Asia Economy Reporter Kim Eunbyeol] International economic leaders gathering at the '50th World Economic Forum (WEF, also known as the Davos Forum)' to be held in Davos, Switzerland from the 21st to the 24th identified 'economic disputes and confrontations' as a risk factor that could sharply rise this year.

Although most young experts surveyed pointed to environmental disasters as the biggest problem, global policymakers and investors identified economic confrontations caused by national conflicts as an issue that could rapidly emerge this year.

According to the '2020 Global Risks Report' released by WEF, a survey of global industry leaders showed that 78.5% of respondents selected 'economic confrontation (trade friction)' as the most rapidly rising risk factor this year.

Next, domestic political polarization (78.4%) was cited as the top concern. Leaders clearly recognized economic and political issues as risk factors rising sharply worldwide, even more so than environmental problems.

However, in surveys including all young people, climate change issues swept through more than five of the 2020 risks.

Specifically, among the economic issues respondents mentioned were asset bubbles and deflation, oil shocks, financial and economic structural collapse, trade disputes, unemployment, and uncontrollable inflation.

Among economic issues, the fact that bubbles, deflation, and inflation were simultaneously cited as potential problems this year is notable. This can be interpreted as indicating the difficulty in predicting which direction the global economy will take. Although the trade dispute issue has somewhat subsided due to the first phase trade agreement between the US and China, trade negotiations remain uncertain, and conflicts with the European Union (EU) and others are also anticipated.

Political and social issues cited included geopolitical conflicts and social instability caused by wealth disparity. Last year, political instability continued in South American and Middle Eastern countries, leading to protests and terrorism, which in turn caused short-term sharp rises in oil prices. In such cases, energy prices surge, and regions including South Korea and Asia cannot avoid the impact.

WEF pointed out, "The global economy is in a situation where turmoil such as clashes between major powers and trade wars has become the 'New Normal.'"

This content was produced with the assistance of AI translation services.