Businesses in the Asia Pacific (APAC) region face mounting challenges from economic pressures and rising climate risks, according to a survey by the World Economic Forum, in partnership with Marsh McLennan and Zurich Insurance Group.
The Executive Opinion Survey gathered responses from over 11,000 business leaders in 121 countries. Key risks cited by APAC leaders include potential recessions, natural disasters, and labour shortages.
Economic concerns remain the leading issue across Oceania, Southeastern Asia, and Southern Asia. In Eastern Asia, however, labour and talent shortages have overtaken economic worries as the top risk, up from a top-five risk position last year.
Labour shortages are now the leading concern for Eastern Asia, reflecting a shift in risk priorities. This trend highlights the growing pressure on firms to attract and retain skilled workers, especially as economic uncertainty persists.
The APAC region continues to face a dynamic risk environment, with uncertainty around the economy leading the agenda. These challenges are compounded by escalating climate risks, socioeconomic disparities, talent shortages, and geoeconomic tensions. They outrank risks linked to AI usage and cyber threats, which remain ongoing concerns in the region
Sid Medappa, Chief Risk Officer APAC at Zurich Insurance Group
Climate risks are a growing threat, especially in Oceania and Eastern Asia. The frequency and severity of extreme weather events, including floods and heatwaves, are on the rise. Businesses are urged to bolster climate resilience to manage operational disruptions and protect long-term growth.
Medappa highlighted that building resilience in 2025 will depend on how well businesses address the interplay of these risks. He emphasized the need for proactive risk management strategies to navigate uncertainty and seize growth opportunities.
Inflation continues to strain business costs and consumer spending. Rising prices hit Oceania and Southeastern Asia hardest, compounding growth challenges. Businesses face increased operational expenses while consumers experience reduced purchasing power, slowing overall demand.
Southern Asia grapples with poverty, income inequality, and unemployment, while Oceania and Southeastern Asia also face rising socioeconomic disparities. Limited economic opportunities in these regions exacerbate the risks, requiring targeted policy responses.
Trade tensions and geopolitical conflicts continue to disrupt supply chains and investment flows in Eastern Asia. These disruptions affect business stability, prompting firms to seek alternative suppliers and diversify trade partnerships.
The report calls for increased investment in climate resilience, workforce development, and inclusive socioeconomic policies. Addressing these interconnected risks will enable businesses to strengthen adaptability and safeguard growth. Cross-border cooperation is also seen as vital for mitigating the impact of global uncertainty and enabling businesses to thrive in a volatile world.
