emerging
Rising Geoeconomic Fragmentation
Geopolitical factors are increasingly influencing trade and investment decisions, leading to the potential formation of rival economic blocs and a reversal of globalization.
Timeframe
long-term
Subcategories
Impact areas
Detailed Analysis
Geopolitical fragmentation is reshaping the global economy, with geopolitics driving trade and investment decisions. "Nearly 3,000 trade-restricting measures were imposed in 2023, almost three times the number during 2019." This fragmentation risks undermining the benefits of globalization, as "restrictions diminish efficiency gains from specialization, limit economies of scale, and reduce competition."
Context Signals
Increased trade restrictions and industrial policies.
Formation of rival economic blocs.
Reversal of global economic integration.
Edge
Regionalization of supply chains.
Increased focus on domestic production and consumption.
Potential for greater economic self-sufficiency.
