Populist policies expected to weaken global trade

03 August 2017

Global commodity prices likely to remain at low levels over the next 12 months

Global trade is expected to decline over the next 12 months as a result of rising populism and protectionist policies globally, according to a survey conducted US-based consultancy AT Kearney.

“Roughly three-quarters of executives believe that populist policies will continue to gain strength… around the world over the next year, with global trade declining due to the growing prevalence of protectionist measures,” the report, Views from the C-Suite, said.

The respondents indicated that global commodity prices will likely remain at current low levels directly impacting global trade.

Populist policies are rated third most important political risk in the study, which surveyed 400 senior executives across the world’s leading corporations.

They trail behind worsening tax and regulatory policies and unstable geopolitical dynamics including refugee or migration crises, armed conflict, terrorism, piracy and crime.

It is the second year that geopolitics emerged as the top political risk among those surveyed.

Cyber security was considered by 43 per cent of the respondents as their top operational challenge over the next 12 months, with nearly twice that figure, 85 per cent, indicating that cyber attacks are likely to become more frequent and costly over the next year.

“The degree to which technology and political risk dominate this year’s results is striking,” Erik Peterson, managing director of AT Kearney’s Global Business Policy Council and co-author of the study, said. “Global executives are paying more attention to government actions and identifying risks stemming from geopolitical tensions and domestic regulatory and tax policy changes.”

AT Kearney’s Global Policy Council conducted the survey in June.

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