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Global Economy 'in No State To Cope With New Shocks'

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Global leaders received a blunt warning today that the world would be unable to cope with an array of potentially "disastrous" shocks after being left weakened by the financial crisis of 2007-2009.

The annual risks survey prepared for the World Economic Forum in Davos later this month identified inequality and weaknesses in global governance as the two key challenges facing policymakers.

"The world is no position to face major, new shocks," the report noted. "The financial crisis has reduced global economic resilience, while increasing geo-political tension and heightened social concerns suggest that both governments and societies are less able than ever to cope with global challenges. Yet, we face ever-greater concerns regarding global risks, the prospect of rapid contagion through increasingly connected systems and the threat of disastrous impacts."

Although growth has resumed since the global recession reached its trough in the spring of 2009, the WEF study expressed concerns about the threats posed by global economic imbalances, the danger of countries defaulting on their debts, the growth of an illegal economy and the pressures on food and water from a rising and richer global population.

"Globalisation has generated sustained economic growth for a generation", the report said. "It has shrunk and reshaped the world, making it far more interconnected and interdependent. But the benefits of globalisation seem unevenly spread – a minority is seen to have harvested a disproportionate amount of the fruits."

Would that be the global banking elite by any chance?

Nice to know that the global financial system is robust, still I'm sure there won't be any more shocks as we can just drip feed bailouts to indebted nations and carry one.

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