PremiumWorld Stumbles Towards Volatile 2030s As Goldman Finds Global Alignment Hits Lowest In Decades
Geopolitical risk has surged since 2016, driven by trade wars, the Covid shock, the Russia-Ukraine war, and, more recently, the Trump administration's efforts to increase US power across the Western Hemisphere and to encourage Gulf states to rewire energy flows around the Strait of Hormuz. These major structural shifts are having sizeable impacts on the global economy: the gradual fragmentation of geopolitical alliances and the emergence of competing trade, investment and security blocs.
Goldman analysts Johan Allen and Joseph Briggs wrote in a note on Thursday that "Geopolitical risks from the war in Iran have faded since March. But broader risks around geopolitical and economic fragmentation remain, with some measures signaling the lowest level of global alignment since the 1980s."
The takeaway is that the world is gravitating back to what it was in the age of empires a century or more ago - one where big powers and spheres of influence dominated, with many more competing powers. These shifting alliances and competing blocs are poised to reshape global trade, investment, and economic growth for decades