June 29: Global economic fragmentation could lead to a substantial loss in economic output, potentially cutting up to $6.9 trillion from world GDP, according to the World Economic Forum (WEF).
The report highlights that rising geopolitical tensions, increasing trade barriers, and shifting global alliances are contributing to a more divided global economic system. This fragmentation is expected to disrupt supply chains, reduce trade efficiency, and slow down global productivity growth.
According to the WEF, a fragmented global economy may also raise costs for businesses, limit access to critical technologies, and weaken cross-border investment flows. These challenges could have a widespread impact on both developed and emerging economies.
Emerging markets, which are more integrated into global supply chains, may face heightened vulnerability, while advanced economies could also experience slower growth due to reduced international cooperation and trade integration.
Experts stressed the need for stronger global coordination, resilient supply chains, and open trade frameworks to reduce the risks of fragmentation and support long-term economic stability and growth.
