Risk Managers Expect Prolonged Recession From COVID-19: World Economic Forum

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Risk managers expect a prolonged global recession as a result of the coronavirus pandemic, a report by the World Economic Forum showed on Tuesday.

Two-thirds of the 347 respondents to the survey – carried out in response to the outbreak – put a lengthy contraction in the global economy top of their list of concerns for the next 18 months.

Half of risk managers expected bankruptcies and industry consolidation, the failure of industries to recover and high levels of unemployment, particularly among the young.

More From the Risk Report The report, COVID-19 Risks Outlook: A Preliminary Mapping and its Implications, asked nearly 350 senior risk professionals to look at the next 18 months and rank their biggest concerns for the world and for business. The immediate economic fallout from COVID-19 dominates companies’ risks perceptions. But cyberattacks and data fraud are also major threats – according to one-half of respondents – while the breakdown of IT infrastructure and networks is also a top concern. Geopolitical disruptions and tighter restrictions on the movement of people and goods are high on the worry list. The report calls on leaders to act now against future systemic shocks such as the climate crisis, geopolitical turbulence, rising inequality, strains on people’s mental health, gaps in technology governance and health systems under continued pressure.

“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past,” said Saadia Zahidi, managing director of the World Economic Forum.

Environmental goals risk being discarded as a result of the pandemic, the report said, but governments should try to carve out a “green recovery.”

“We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive,” Zahidi said.

The report was compiled by the World Economic Forum’s Global Risks Advisory Board together with Marsh & McLennan Cos. Inc. and Zurich Insurance Group.

Risk managers were surveyed between April 1 and 13.

(Reporting by Carolyn Cohn; editing by Lisa Shumaker)