A report published by Marsh highlights substantial global economic growth drivers that the risk advisory believes present opportunities that outweigh the prevailing risks.
The report identifies four areas where increasing risk threatens global trading, security and investment environments into 2023: persistent political instability; economic retrenchment; competition for strategic resources; and supply chain diversification.
Despite the current elevated risk environment, there are signs that the perceived level of risk exceeds actual risk levels and that at least four significant global economic growth drivers could fuel economic recovery and improve security.
According to the report, the lockdown backlog of infrastructure investment points to a rise in future activity and expansion globally, while the push to meet 2030 net-zero energy transition goals will see a range of innovative investment activity. The need to diversify supply chains to achieve greater food and energy security will continue to attract investment opportunities, as will the substantial rise in government defense spending worldwide to support allies, counter threats and accelerate the sector’s modernisation.
“While it may be unnerving, there are many opportunities for businesses and investors to grow in today’s elevated geopolitical and economic risk environment,” said Nick Robson, global head of credit specialties, for Marsh Specialty. "If the risks are identified, managed and mitigated effectively, the prospects for short, medium and long term growth frequently outweigh the risks presented by short term volatility.”
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