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  • In early 2016, the Economist Intelligence Unit released a breakdown of their analysis of the biggest threats to the global economy.

  • One of the top threats was actually the possible election of Donald Trump as president.

  • They predict that his opposition to free trade

  • and criticism of China and Mexico, which are massive trade partners, poses significant risk to the economy.

  • But Trump is only sixth on the list, so we wanted to know

  • what are the world’s biggest economic threats?

  • Well, the health of the economy is crucial to stability around the world.

  • Several leading threats are centered around the European Union.

  • The EIU notes that Greece’s ongoing debt crisis might be stemmed by the latest austerity measures and bailout.

  • The risk of Greece refusing to abide by the restrictions however, and eventually leaving the EU could

  • create a world of trouble for the international markets.

  • ThisGrexitis especially feared because it would destabilize the surrounding countries

  • leading to the third biggest threat: a breakup of the EU.

  • In recent years, the EU has been struggling to maintain cohesion.

  • With more than a million migrants arriving in Europe, a continued recession following the 2008 global banking crisis,

  • and terror attacks in Paris, and Brussel. The EU is in trouble.

  • Many parties calling for a breakup of the EU, or stricter borders in thefree travel Schengen zone”. This idea have been seeing increased popularity.

  • Even the United Kingdom is gearing up for a referendum to leave the European Union

  • sparking fears that other countries may follow.

  • A breakup of the EU would be disastrous for a huge number of trade agreements and established economic treaties.

  • This could possibly plunge Europe into an even deeper financial crisis, thus destabilizing global markets.

  • The second biggest threat to the economy isn’t actually economic at all.

  • Russia’s military intervention in Syria and the annexation of Crimea has many worried about a new Cold War

  • between The US and Russia. This competitive political fight complicates a number of existing

  • organizations like NATO and the G7, and implies an increase in defense spending on all sides.

  • This takes away from goals like fighting ISIS and global warming

  • and could easily destabilize the world economy.

  • But according to the EIU, the single biggest threat to the global economy is China.

  • China has been growing at a massive and rapid pace, but in recent years the level of growth has

  • been called clearly unsustainable. Despite efforts to manipulate their currency and markets,

  • the renminbi currency is still relatively weak, and their economy has a huge amount

  • of unrecoverable debt. China’s role as a manufacturing and commodity trading leader

  • means that a slump for them is a slump for consumers and businesses worldwide.

  • Although there are a lot of things to be afraid of, the EU, China, and Russia pose the biggest threats to the stability of the global economy.

  • What’s worse is that all of these scenarios are ranked highly because they are also the most likely to occur.

  • By comparison, a Trump presidency is only rated asmoderately probable”.

  • But if the EU falls apart, China’s economy keeps dropping, and a new Cold War emerges,

  • Trump may just be the least of anyone’s problems.

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In early 2016, the Economist Intelligence Unit released a breakdown of their analysis of the biggest threats to the global economy.

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What Are The Biggest Threats To The World Economy?

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    richardwang posted on 2016/04/10
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