The US-China Trade War poses the biggest threat to the global economy, according to a new report released by The Economist Intelligence Unit. The trade war, which The EIU has said risks becoming a ‘technological arms race’, comes top of a ranking of the ten biggest risks to the global economy.
The report, Cause for concern? The top 10 risks to the global economy 2019, also highlights that the combination of risks to the global economy is more wide-ranging and complex than at any point since the Great Recession. The combination of such risks emphasises The EIU's view of a worsening outlook for the global economy in 2019. The report states that with such broad-based uncertainty, policy-makers and businesses will have to commit deeper resources to contingency planning.
The EIU’s Risk Briefing Director, Nicholas Fitzroy, notes: "In light of rising geopolitical uncertainty, broadening economic headwinds and technological shifts in the security landscape, the risks facing the global economy are as wide-ranging and complex as they have been since the Great Recession. Combining all three of these trends, a potential escalation in the US-China trade war is the primary threat to global growth, with the possibility that a number of other countries could be sucked into the conflict."
The top 10 risks:
1 A US-China trade conflict morphs into a full-blown global trade war
2 US corporate debt burden turns downturn into a recession
2= Contagion spreads to create a broad-based emerging market crisis
3 China suffers a disorderly and prolonged economic slowdown
4 Supply shortages lead to a globally damaging oil-price spike
4= Territorial disputes in the South or East China Sea lead to an outbreak of hostilities
5 Cyber-attacks and data integrity concerns cripple large parts of the internet
6 There is a major military confrontation on the Korean peninsula
7 Political gridlock leads to a disorderly no deal Brexit
7= Political and financial instability trigger an Italian banking crisis
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