Geopolitical tensions have surged to the forefront of corporate anxiety, eclipsing all other threats to the global economy even as the likelihood of a sharp downturn remains remote, according to a report by Oxford Economics.

The London-based think tank said in a study released on Monday, Feb. 3, that nearly 60 percentof businesses now identify geopolitical instability as the primary near-term risk.

“The instability is reflected in businesses' survey responses, which suggest that geopolitics is by far the greatest threat to the global economy,” said Oxford Economics Head of Macro Scenarios, Jamie Thompson.

Concerns regarding Greenland have unexpectedly risen to the top of the worry list, followed closely by long-standing tensions between China and Taiwan and escalating instability across the Middle East.

While more businesses reported a negative shift in their outlook for global growth over the past month than those reporting an improvement, the think tank noted that the broader economic foundation remains resilient.

Fears of a systemic global trade war have continued to recede, despite the heightened geopolitical temperature. This suggests that while executives are wary of localized conflicts, they are increasingly comfortable with the current trajectory of United States trade policy.

Moreover, sentiment has remained broadly stable, with only six percent of respondents indicating they have become significantly more pessimistic about the global outlook.

The Oxford Economics Global Business Sentiment Index currently indicates that global growth will slow to 2.2 percent in 2026, slightly below baseline forecasts but remains higher than the projections recorded following the implementation of US tariffs last year. The reading is largely unchanged from December levels, suggesting a plateau in business expectations.

The profile of economic threats is also evolving. While the rise of populism is increasingly cited as a risk, anxiety regarding high levels of public debt has cooled significantly.

In the previous quarter, public debt was tied with geopolitics as the most significant medium-term threat; it has since fallen to fourth place. Only a third of respondents now prioritize debt as a major concern, down from nearly half in October. This easing of fiscal fears is accompanied by a corresponding drop in worries over a potential financial crisis.

For the long term, however, geopolitics remains the undisputed dominant concern. Half of the surveyed businesses view geopolitical risk as very significant—a figure more than triple those who cited climate change as the second-largest long-term threat. In contrast, protectionism is viewed as a limited risk, echoing the decline in near-term trade war fears.

Despite the litany of risks, businesses identified a clear catalyst for growth: the "productivity rebound." Approximately 30 percent of respondents see a near-term boost driven by technological advancements, specifically artificial intelligence.

Oxford Economics noted that AI is expected to be the primary driver of global growth over the coming decades, with nearly three-fifths of businesses identifying it as the leading long-term upside for the global economy.