Assessing and Managing Economic Risk in an Unpredictable Global Environment

Abstract

Economic activity is inherently bound with risk and uncertainty, but in today’s interconnected world, the magnitude and complexity of risks have grown significantly. From geopolitical tensions and technological disruptions to climate change and pandemics, modern economies face multifaceted threats that defy traditional models of risk assessment. This study critically examines the limitations of conventional economic risk evaluation and explores new approaches that integrate geopolitical analysis, artificial intelligence (AI), big data analytics and scenario-based stress testing. The research reviews existing literature, highlights the influence of geopolitical events on global markets, explores the role of emerging technologies in risk modelling and assesses sector-specific risks across finance, healthcare, energy and real estate. Findings suggest that economic risk assessment must move beyond static indicators to adopt adaptive, technology-driven and collaborative frameworks. By integrating predictive modelling, continuous monitoring and resilience strategies, policymakers and organisations can better anticipate challenges and leverage opportunities in an increasingly volatile global landscape.