Fracturing and the impact on geopolitics & institutions

In a fractured world, the role of global institutions is likely to decline even further. The consequences of weakened multilateral economic institutions (e.g. the IMF and World Bank) would be felt most heavily in emerging markets by reinforcing the trend of slowing productivity growth. At the same time, a diminished global security architecture could make conflict more prevalent. In extreme cases, this could trigger an abrupt rupture of relations between China and the West with disastrous economic consequences. And even if conflicts occur that don’t have such seismic effects, they could still trigger sporadic bouts of financial market volatility and inflation.