Geopolitical uncertainties continue to challenge the global economic prospects, with the ongoing conflicts disrupting supply chains and affecting vulnerable economies. While declining inflation and policy rate cuts are boosting sentiment, the global risk level in Q3 2024 remained stable at 55.6 out of 100, compared to the previous quarter, though it has decreased from levels observed in Q1 2024 (57.2) and Q4 2023 (57.3), says GlobalData, a leading data and analytics company.
GlobalData’s latest report, “Global Risk Report Quarterly Update – Q3 2024,” indicates slight risk score declines in Europe, Asia-Pacific, and the Americas. Europe held the lowest risk score among the regions while the Middle East and Africa witnessed increased risk levels.
Gayatri Ganpule, Economic Research Analyst at GlobalData, comments: “Global economic growth is forecasted at 3.1% for 2024, a slight moderation from 3.2% in 2023, underscoring both resilience and persistent challenges. While declining inflation and accommodative rate cuts provide a boost to recovery, the ongoing geopolitical tensions and elevated freight costs continue to weigh on supply chain dynamics, tempering overall momentum.”
Europe – Recovery underway, but geopolitical tensions persist
Europe remains the world’s least-risk region, with its risk score slightly improving from 41.8 in Q2 2024 to 41.4 in Q3 2024. Economic recovery continues, with gradual growth, a steady decline in inflation, and investment momentum boosted by rate cuts, including those by the ECB. However, recovery is moderated by the ongoing geopolitical tensions, labor shortages, and climate concerns. In the Q3 2024 GCRI update, Switzerland, Denmark, and Luxembourg were the least risky while Ukraine, Turkiye, and Belarus had the highest risk.
Asia-Pacific – Lower risk, but India and China slowdown concerns
The Asia-Pacific region’s risk score slightly decreased from 54.1 in Q2 2024 to 54.0 in Q3 2024, reflecting positive economic trends in emerging markets and policy support from China. The region is expected to remain the fastest-growing globally in 2024, driven by strong contributions from emerging economies.
However, risks persist due to slowdowns in China and India. China’s growth slowed to 4.6% in Q3 2024, the weakest since Q1 2023, due to the ongoing property sector issues and deflation risks. Similarly, India’s growth decelerated to 6.7% in Q2 2024, the slowest since Q2 2023, with high-frequency indicators signalling signs of weakening.
Pakistan, Myanmar, and Bangladesh were the highest-risk countries while Taiwan (Province of China), Singapore, and Hong Kong (China SAR) were the least risky in the Q3 2024 GCRI update.
Americas – Slight risk drop amid economic gains and political uncertainty
The Americas’ risk score edged down slightly from 57.1 in Q2 2024 to 57.0 in Q3 2024, benefiting from the easing inflationary pressure and policy rate cuts. However, challenges such as high US debt and the ongoing fiscal issues in Latin America persist. Political unrest across the region, including protests in Latin America and the disputed Venezuelan election, adds to the uncertainty.
With Donald Trump’s return to the presidency, the political climate remains volatile, potentially impacting economic strategies and stability in the Americas. Canada, the US, and Costa Rica were the least risky nations while Haiti, Venezuela, and Argentina were the highest-risk nations in the Q3 2024 GCRI update.
Middle East and Africa – Rising risks amid conflicts and humanitarian crises
The Middle East and Africa’s risk score increased from 65.9 in Q2 2024 to 66.3 in Q3 2024, driven by escalating tensions in the Middle East, oil volatility, and shipping disruptions. Africa faces challenges, including widespread flooding in West and Central Africa, which has displaced millions and worsened food insecurity. The Greater Horn of Africa also grapples with severe malnutrition, affecting millions, particularly children. These crises, coupled with high debt and ongoing conflicts, heighten regional instability and risk.
In the Q3 2024 GCRI update, seven of the top 10 highest-risk nations globally—Yemen, Syria, Burundi, Iran, Zimbabwe, Nigeria, and Malawi—are from the Middle East and Africa (MEA) region.
Ganpule concludes: “Global risk levels remain stable, with varying challenges across regions. While some areas demonstrate resilience and progress, others face increased risks due to geopolitical tensions, natural disasters, and instability. Addressing these challenges will require careful adjustments and a focus on long-term stability.”
