Money, society and climate top the risk agenda in Latin America and the Caribbean

The risk agenda for Latin American and Caribbean (LATAM) leaders aligns with the global average as economic, social and climate risks claim the top spots in the World Economic Forum’s Executive Opinion Survey (EOS). The EOS collates perceptions of risk from 11,000 respondents in 110 countries and dependencies, gathering insights on the major concerns of global leaders.

Economic issues are top of mind for LATAM leaders, mirroring sentiments around the globe. The prospect of a looming economic downturn is the top risk in LATAM countries, while a further two financial risks – public debt and inflation – come in at second and third respectively. Public debt is also a top five concern in two other regions – Europe and the Middle East & North Africa (MENA).

LATAM leaders’ focus on fiscal pressures comes off the back of softening growth in 2023. The region held up well to the shock of the pandemic and the global energy crisis, but economic growth is expected to dip from 4.1 percent in 2022 to 2.3 percent this year. Global inflation is another key concern in nine out of 10 other regions, even though forecasts suggest that it could decline from 6.9 percent in 2023 to 5.8 percent in 2024 as a result of tightening monetary policy.

The impact of climate change weigh heavily on LATAM leaders’ minds — they rank extreme weather events as the fifth greatest risk, joining North American and Oceanian leaders who also viewed this as a top risk. This is perhaps unsurprising given the increasing impact of climate change in the region. This year alone, an unprecedented winter heatwave swept over parts of South America and caused the highest winter temperature ever recorded in the southern hemisphere. LATAM countries also ranked the risk of non-weather-related natural disasters almost twice as high on their list compared to other world leaders, placing it at 17 rank.

Beyond financial and climate-related pressures, LATAM leaders also see a risk agenda dominated by societal concerns. They rank the erosion of social cohesion and wellbeing in fourth place, mirroring the sentiments of G20 leaders, who also include this risk in their top five.

Some risks are taking up much less space on the LATAM risk agenda than they are elsewhere. The risk of interstate armed conflict ranks close to the bottom of the list at 26 for LATAM leaders, which suggests that LATAM leaders feel more insulated from global tensions than leaders in other parts of the world.

LATAM countries’ concerns mirror those being felt around the world, with financial and societal pressures coming out on top. But a regional focus on environmental risks, fueled by the increasing severity of the impacts of climate change, is also taking up significant space in the minds of LATAM leaders. Cooperation between businesses, governments and insurers is vital for tackling this complex risk landscape and building resilience.