Investors should not tear up their playbooks over geopolitical risks

GEOPOLITICAL pressures have posed unrelenting challenges for the global economy in recent years. Activity has been restrained by the Russia-Ukraine war, hostilities in the Middle East, and ongoing tensions between the US and China.

In tandem, populist political voices are gaining increased prominence in countries around the world. Such developments have, at least at times, disrupted commodities markets, put pressure on supply chains, shifted patterns of trade and capital flows and amplified uncertainties.

These recent challenges have led to perceptions that geopolitical pressures are becoming more frequent and severe. And some observers have argued that we’re entering a new regime in which economic fundamentals will take a back seat to geopolitical developments.