Are emerging markets immune to rising geopolitical tensions?

The World Economic Forum’s 2026 Risks Report is unequivocal: geo-economic confrontation now tops the global risk agenda. Governments are increasingly weaponising trade, finance, technology, sanctions, and supply chains – a decisive shift away from the post‑Cold‑War era of open markets and predictable rules. Markets have become arenas of strategic competition, not cooperation, driving heavier defence spending, more interventionist industrial policy and renewed strain on political alliances. These pressures fall disproportionately on Europe’s already‑tight fiscal space, meaning macro risk is tilting more toward developed Europe than toward core emerging markets.