KUALA LUMPUR: Economic downturn, rising inflation and the potential risk of asset bubbles are among the key concerns highlighted in the 21st edition of the World Economic Forum’s (WEF) Global Risks Report 2026 which could affect Malaysia, said WEF managing director Saadia Zahidi.
She said economies that rely on trade for growth are likely to be affected by tariffs and the growing geoeconomic confrontation.
"In addition to that, I think if any of these concerns about inflation or asset bubbles or an economic downturn were to start materialising, that will have a huge impact on demand, particularly for goods and services that come from large emerging markets like Malaysia,” she told the media during the online presentation of the report today.
She added that Malaysia as a key player in East Asia and the global economy places it at the centre of these challenges, however large countries can still take action to influence outcomes.
"I think we're also starting to see on the flip side of this, that this more unsettled picture is leading to new alliances, new regional trade agreements, new multilateral or bilateral trade agreements. So, there is also a shift towards the more positive in this current outlook,” she added.
She noted that concerns about an economic downturn have risen, moving up eight places to 11th position, higher than in previous years.
"Inflation had really fallen down the list after having risen in the past directly after the pandemic. But it's now jumped eight positions to 21st from the lower half of the rankings.
"Finally, concerns about a potential asset bubble have gone up seven positions to 18th, in the middle of the rankings, in this past year,” she said.
According to the report, the top five risks for Malaysia identified by the Executive Opinion Survey (EOS) 2025 are geoeconomic confrontation (sanctions, tariffs, investment screening); talent and/or labour shortages; disruptions to a systematically important supply chain; adverse outcomes of artificial intelligence technologies; and lack of economic opportunity or unemployment. - Bernama
