Marsh Report: Geopolitical Shifts Challenge Business Confidence

Marsh recently released its 2024 Political Risk Report. The report offers insights into the prevailing global political and economic trends set to influence multinational corporations and investors in the coming year.

The report points to the unprecedented long-term uncertainty, intensified by the largest election year globally. This uncertainty arises from macroeconomic competition and geopolitical instability, leading to widening economic disparities among industries and economies. Additionally, increased government involvement and the rising unpredictability of disruptive security incidents add to the challenges.

Despite these challenges, the report identifies significant global growth prospects for organizations that adeptly manage these risks. A historic number of voters this year are expected to prioritize both domestic economic issues and international security. The misuse of artificial intelligence (AI) by various entities to spread misinformation exacerbates policy uncertainties and elevates the risks of political violence for businesses and investors.

Further, the report warns that the fragile macroeconomic conditions post-2024 elections will face additional strain due to substantial debt levels across corporations and governments. Coupled with potential sluggish growth in developed regions, this could disrupt governmental investment strategies and heighten credit risks, supply chain disruptions, and business interruptions for organizations.

The report suggests that collaboration on critical global issues might become scarcer in the coming decade, necessitating innovative risk management strategies. The report also identifies climate change and the energy transition as areas particularly susceptible to conflicts between national policymakers, market forces, and international consensus in the upcoming year.

Robert Perry, global political risks and structured credit leader at Marsh Specialty, commented, "The outcomes of the elections taking place this year are set to direct the course of global events for the next decade and beyond. While the world feels like a riskier place in such a time of such macroeconomic and geopolitical uncertainty, businesses that effectively manage and transfer risks in this rapidly changing environment will be well-positioned to seize on future growth opportunities and continue to thrive."