The Global Risk Network has launched its second Global Growth@Risk report ahead of the Forum’s Annual Meeting of New Champions in Tianjin, China. The report considered a number of short-term and longer-term risks to growth for both markets and corporations.

Executive Summary
The convergence of the sub-prime crisis and the ensuing credit crunch, concerns about inflation and a possible slowdown in 2009 have engendered a great deal of uncertainty about the short-term outlook for global economic growth.

Looking beyond the immediate problems, three trends are emerging as influential for future growth prospects at the corporate, national and global level: first is the emergence of fast-growing economies, with large populations and rising middle classes; second is the increased demand – and competition for - the inputs, capital, energy, commodities and skills necessary to sustain economic growth; and third is the growing importance being placed on innovation and technology as sources of solutions to a range of global problems. The intersection of these trends will offer opportunities to business and society, but will also present fresh challenges and risks to be managed.

This report explores these future drivers of growth, as well as the risks and opportunities emanating from three issues identified in the World Economic Forum’s Global Risk Report 2008, i.e. financial risk, energy and food security. Our conclusions all point to a critical need to achieve a balance between economic growth and resource sustainability.

Market regulation alone cannot prescribe this, as tensions exist across markets and between longand short-term strategies. Companies with the vision to connect global trends and risks with their own strengths and market knowledge, and to participate in collaborative efforts to manage those risks accordingly, will be better prepared for global growth.

Download Global Growth@Risk Report 2008

PDF format, 1.7MB, 18Pages.

CONTENTS
Page 4 Executive Summary
Page 5 From Global Risk to Business Risk
Page 6 The Current Economic Landscape
Page 8 The Financial Crisis and Access to Capital
Page 10 Demands on Resources
Page 12 The Next Drivers of Growth
Page 15 Acknowledgements
Page 16 Bibliography

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Key conclusions:

• Global growth forecasts reflect a shift of economic power to high growth, highly populated economies and wealthy oil producing nations

• Emerging market growth appears less susceptible to a slowdown in the US but low-income countries face risks from inflation in the form of loss of domestic market growth, wage increase pressures, and greater societal and political instability

• Central banks and regulatory institutions are facing a policy paradox: trying to restore confidence while managing both recessionary and inflationary pressures

• Uncertainty abounds about further losses from the financial crisis and the extent to which it will impact the real economy, both in the US and globally

• Financial regulation must avoid placing further pressure on the financial system through high compliance costs and decreased competitiveness and innovation

• Sovereign wealth funds, private equity and financial institutions of high-growth markets are significant sources of capital but may face regulatory barriers or even economic nationalism

• Population growth and the economic shift to middle-income economies, are giving rise to a rapidly growing global middle class. While their spending power will drive growth, governments and business need to create ways to make this coming boom in consumption sustainable

• Innovation and technology are drivers of growth for businesses and economies but require significant investment and support to develop the human and financial capital

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