The World Economic Forum (WEF) released a new survey highlighting the major macroeconomic conditions that will impact the global community in H2 2023.
It polled 40 Chief Risk Officers (CROs) from the private sector as part of the WEF’s Global Risks Initiative. Survey respondents identified macroeconomic indicators as well as pricing and supply disruptions as top concerns for organizations worldwide.
Among the respondents, 85 percent say they expect continued shocks in economic and financial conditions for the rest of the year. WEF completed the survey in June this year.
“CROs are facing a multitude of pressing concerns as they look to the remainder of 2023,” said Ellissa Cavaciuti-Wishart, head of Global Risks Initiative, World Economic Forum. “While continuing to grapple with rising costs and supply disruptions, organizations are increasingly faced with a number of ethical and societal risks, which are far more complex to navigate than regulatory compliance alone.”
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Other major issues
WEF said recent months have also seen a sharp increase in discussion of technology-related risks. CROs surveyed agree that risk management is not adapting with rapid artificial intelligence (AI) developments and deployment.
An overwhelming majority (75 percent) said the use of AI technologies poses reputational risks to their organizations. The respondents represented multinational companies covering sectors such as technology, financial services, healthcare, professional services and industrial manufacturing.
Meanwhile, 90 percent called for accelerated regulation of AI technologies. Almost half of respondents believe some AI developments need to slow down until the associated risks are better understood.
Moreover, more than half of respondents identified pricing and/or supply disruptions of critical resources, such as fuel, as highly likely to have a severe impact on their organizations over the coming months.
According to WEF, food prices are above historical averages in most major economies. The El Niño weather phenomenon could also disrupt crop production and lead to water shortages.
Earlier this year, the International Monetary Fund (IMF) said global growth will fall to under three percent this year.
WEF goals
“The aim of the outlook is to provide a midyear pulse check from the perspective of on-the-ground risk practitioners,” WEF’s report said.
It also seeks to identify priorities for action by policymakers and business leaders facing compounding shocks to economies and societies.
Overall, the results point to a range of global risks with the potential to threaten economic growth. The CROs are also cautious about global markets being destabilized by socio-economic factors. These, according to the WEF, could potentially disrupt broader business operations.
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