As we enter 2025, the global economy faces a turbulent and uncertain year, driven by a combination of worsening armed conflicts and the intensifying effects of climate change. A new report from the World Economic Forum (WEF) underscores just how precarious our economic outlook has become, with war and extreme weather emerging as the foremost risks. While this is a trend we have seen building for years, the urgency has never been so palpable, as these crises now threaten to destabilize economies on a scale not seen in generations.
The WEF’s Global Risks Report 2025, which polled over 900 experts, policymakers, and business leaders late last year, paints a stark picture. Of those surveyed, 23% cited state-based armed conflict as the most immediate danger to global economic stability, while 14% highlighted extreme weather events, largely driven by climate change, as a primary concern. Together, these issues compound the uncertainties that the world faces, creating a dangerous feedback loop where one crisis exacerbates the other.
Wars around the globe, particularly in regions like Sudan and Ukraine, have already sent shockwaves through international markets, disrupting supply chains and increasing the costs of essential goods. For many economies, the ramifications of these conflicts are far-reaching, with trade routes affected, labor forces displaced, and national budgets strained. It’s not just the immediate effects that worry experts; it’s the long-term erosion of trust in global stability that these wars signal. The world is increasingly seeing violence as a method of resolving disputes, and the fear is that more nations might follow suit, each conflict spiraling further out of control and dragging down the global economy in its wake.
At the same time, climate change is exacerbating existing vulnerabilities. Extreme weather events—floods, heatwaves, wildfires, and droughts—are becoming more frequent and severe, causing widespread destruction. The economic consequences are clear: agriculture is disrupted, infrastructure is damaged, and resources are stretched thin. But beyond the immediate impact, the slow-moving disaster of climate change is now seen as a top-tier threat to global economic health. The WEF survey finds that experts expect these weather events to disrupt economies for years to come, with growing concerns over resource shortages, biodiversity loss, and the degradation of natural systems that underpin global prosperity.
The consequences of these intertwined crises are already being felt. The WEF’s survey found that a majority of respondents expect the global outlook to remain “unsettled” in the short term, with 31% anticipating a “turbulent” year ahead. This sense of foreboding is a sharp contrast to previous years, when the outlook, though cautious, was far less pessimistic. With climate change and conflict compounding the risks, this “unsettled” view represents a deeper malaise—one that goes beyond the political and economic issues of today, extending into an uncertain future.
The most alarming aspect of the report, however, isn’t just the heightened risks of war or extreme weather. It’s the widespread sense of powerlessness and division that seems to be paralyzing global governance. Experts and leaders alike are acknowledging that we are at a crossroads. The report points out that misinformation and disinformation, often fueled by political polarization, are further complicating the already challenging task of addressing these global risks. When public trust in institutions erodes, and truth itself becomes a casualty of ideological conflict, the necessary cooperation to address climate and conflict risks becomes even harder to achieve.
We now face a critical choice: will world leaders rise to the occasion and work collaboratively to build resilience, or will they remain trapped in a cycle of reactive crisis management? The stakes have never been higher. The WEF’s Managing Director, Mirek Dusek, put it bluntly: in a world marked by “deepening divides and cascading risks,” global leaders must choose whether to foster cooperation and resilience or risk further instability. The alternative is an increasingly fragmented and volatile world, where the effects of conflict and climate change spiral out of control, with no end in sight.
As world leaders prepare to gather in Davos on 20 January for the WEF’s annual meeting, the conversation should be clear: this is not a time for business as usual. The crises of 2025 demand bold, collective action. The global community must not only confront the realities of war and climate change but must also address the underlying causes—inequality, resource depletion, and political extremism—that allow these crises to thrive. The future of the global economy—and the stability of the world itself—depend on the choices we make now. The clock is ticking, and there is little time left to delay meaningful change.
