The Global Risks Report has identified the global cost-of-living crisis as the most significant risk over the next two years, and it is already occurring. Inflation has affected those with limited financial resources more severely, with essential items like food and housing already becoming pricier even before COVID-19. Furthermore, disruptions in energy and food supplies from Russia and Ukraine have resulted in higher global inflation.
There is a risk that Russia may exit the Black Sea Grain Export Deal, causing necessary commodity prices to fluctuate significantly. Should the crisis continue, more vulnerable individuals may become unable to afford fundamental necessities, causing unrest and political instability.
Several economies are witnessing a rise in household debt, while global mortgage rates have surged to their highest level in more than ten years. Lower socio-economic groups, who are more likely to rent but unable to cope with rental price hikes, have experienced rent inflation. Increased costs of food, energy, and housing could lead to individuals making essential spending trade-offs, negatively affecting the health and well-being of communities.
Source: World Economic Forum, The Global Risks Report 2023, 18th Edition