Issue Regional conflicts, a Chinese slowdown and climate shocks as further downside risks

Summary

KISDI also groups several non-financial shocks among the downside risks facing the world economy. An escalation of regional conflicts, including the war involving Russia and Ukraine and disputes in the Middle East, could make commodity prices more volatile and threaten food security. If China's property slump drags on or its domestic demand proves weaker than expected, the spillover could depress global trade and demand for raw materials. Extreme weather and natural disasters could cause severe damage to food production and economic activity, especially in vulnerable countries. Together these risks reinforce the institute's view that the global outlook is skewed to the downside for the forecast period.