Fiscal, Pay Imbalances Biggest Risks to Economy, WEF Says

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Photographer: Peter Parks/AFP via Getty Images

A Ferrari as a cyclist passes by on a street in Beijing.

Income disparities and government budget deficits present the most likely risks to the global economy in the next decade, according to the World Economic Forum.

Such threats leave the world more at risk as the financial crisis persists, the Geneva-based group said today. The report, presented today at Bloomberg’s London headquarters, was based on a survey of 1,000 experts and industry leaders. Income and budget imbalances were cited as the key threats in the same survey a year ago.

“These global risks are essentially a health warning regarding our most critical systems,” said Lee Howell, the report’s editor and a managing director of the WEF. “National resilience to global risks needs to be a priority so that critical systems continue to function despite a major disturbance.”

Rising greenhouse gas emissions were named the third most likely global risk following a year assailed with weather shocks such as superstorm Sandy.

The report, published two weeks before the forum’s annual meeting in the Swiss resort of Davos, also suggested advances in health care have led to complacency about medical risks. Another threat is the unpredictability of technology in shaping societies.

Among potential game-changers, or what the report calls “X-Factors,” are runaway climate change, the cost of living longer or discovery of alien life.

To contact the reporter on this story: Simon Kennedy in London at skennedy4@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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