What are the biggest risks haunting the world? Back in 2010, it was fiscal and finance threats — at least according to an annual survey of participants in the World Economic Forum meeting at Davos. Then in 2020 environmental issues topped the league.
Now worries about war, of both the kinetic and economic sort, are dominating, judging from the latest WEF poll. Fiscal issues have plunged to 17th place. This is striking. However, as the Davos tribe gathers next week, investors should remember a key point: the WEF consensus is often wrong. So much so that some hedge fund types joke that the smartest trade is to do the opposite of whatever the Davos discourse implies.
So could 2026 be the year that fiscal risks finally explode in an “economic reckoning”, to cite the WEF? Should we care that global debt now sits at above 235 per cent of global GDP, and rising, at a time when markets seem calm?