The Top 5 Global Risks for 2023

1. Russia-Ukraine War

Topping the list of the top global risks for 2023 is the Russia’s war with Ukraine. The war is almost a year old now, having started when Russia invaded Ukraine unprovoked in February 2022. Many thought that Russia’s war with Ukraine would be a short one; after all, Russia has regularly been ranked among the most powerful militaries in the world and the second-most powerful military in Europe. However, Ukraine was provided unprecedented support by Western nations including those in the European Union and the U.S., which has resulted in a strong fightback from Ukraine, weakening Russia’s military strength. Currently, it appears that markets have priced in the expectation that the war’s intensity is subsiding and hopes of a negotiated resolution will prevent re-escalation.

However, there is still a significant risk that the conflict will escalate, especially considering Vladimir Putin’s unpredictability and the constant threat of nuclear escalation is just one of the reasons to keep an eye on how things turn out in 2023. Another risk is Russia preemptively attacking arms shipments from Western nations providing support to Ukraine, which could bring a response from NATO and result in another World War. Any serious escalations in the war could devastate financial markets. On the other hand, U.S. defense companies have benefited strongly in 2022 from the war, as the U.S. has provided significant military support which such contracts going to Raytheon Technologies Corporation (NYSE:RTX), Northrop Grumman Corporation (YSE:NOC) and Lockheed Martin Corporation (NYSE:LMT), which is why the latter two stocks saw double digit growth in their share price in the last one year.

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out our articles on 15 States with Highest Tax Revenue per Capita and 15 Most Undervalued Small-cap Stocks To Buy.