The World Economic Forum is warning that the next ten years could be defined by instability, debt stress, global conflict, and deepening inequality, with Sri Lanka among the countries facing the most serious economic and social risks.
The World Economic Forum has cautioned that the coming decade will be marked by severe volatility and uncertainty, according to its recently released Global Risks Report 2026. Drawing on the views of more than 1,300 experts worldwide, the report outlines a complex and increasingly fragile global landscape, with particular implications for vulnerable economies such as Sri Lanka.
According to the report, Sri Lanka is expected to face several acute risks over the next two years. These include the threat of economic recession, shrinking economic opportunities and rising unemployment, shortages of skilled labour and workforce availability, persistent inflation, and an expanding debt burden across public, private, and household sectors. These pressures, the report suggests, could further strain an economy already struggling to recover from recent financial shocks.
The report highlights that global debt has climbed to an estimated US$251 trillion, equivalent to 235 percent of global GDP. In this environment, countries carrying heavy debt loads, including Sri Lanka, are likely to encounter increased difficulty in attracting foreign investment and restructuring existing obligations. High debt exposure, combined with weak growth prospects, may limit fiscal flexibility and slow economic recovery efforts.
Beyond domestic pressures, the WEF warns of intensifying global stress factors. These include escalating debt crises, rising geopolitical tensions, the spread of misinformation, growing technological vulnerabilities, and mounting environmental risks. The convergence of these threats, the report notes, is creating an increasingly unstable global economic and political environment.
Survey findings reveal that 50 percent of experts believe the next two years will be extremely unstable or turbulent for the global economy. This figure is projected to rise to 57 percent over the next decade. Only one percent of respondents expressed confidence that the world will experience a peaceful or stable period, underscoring widespread pessimism about global prospects.
The report also points to a steady erosion of international cooperation and trust. Conflict is increasingly replacing collaboration, with 68 percent of experts expecting a shift towards a fragmented and competitive system of global governance. This trend marks a departure from the post Cold War framework of multilateral cooperation that once defined global decision making.
Geo economic conflict has been identified as the primary global risk for 2026, with 18 percent of respondents warning that such tensions could escalate into a global crisis. Armed conflict between states ranks as the second most significant risk, reflecting heightened geopolitical instability and the growing risk of confrontation between major powers.
Economic recession and inflation have climbed eight places in the global risk rankings. The report warns that challenges related to debt sustainability and the potential bursting of economic bubbles could destabilize societies and businesses over the next two years. For countries like Sri Lanka, these developments pose direct risks as they attempt to manage debt restructuring and restore economic stability.
Inequality remains the most pressing global risk, according to the report. The widening gap between the rich and the poor has intensified tensions between political and economic elites and the broader public. Declining trust in leadership has contributed to a perception that citizens are increasingly excluded from major government decisions.
Misinformation and false information are identified as the second most critical risk in the near term, while cybersecurity threats rank sixth. The report also estimates that the negative consequences of artificial intelligence will emerge as the fifth most significant global risk over the next decade.
Although environmental concerns receive less immediate attention in the short term, extreme weather events are expected to become the most severe global threat over the next ten years. Around 75 percent of experts expressed a highly pessimistic outlook regarding environmental risks.
The report concludes by highlighting a profound lack of confidence in the world’s ability to address shared challenges such as climate change, global health threats, and economic stability, driven largely by the prioritization of narrow national interests over collective global action.
