Bangladesh faces five major risks in the next two years with sustained inflation, debt crises and severe commodity price shocks being the top three challenges for its economy, according to a report released by the World Economic Forum (WEF).

Human-made environmental damage and geopolitical contestation of resources are the rest two risks the nation might face in the short term, according to WEF's The Global Risks Report 2023

The report presents the results of the latest Global Risks Perception Survey (GRPS) based on insights on the evolving global risks landscape from over 1,200 experts across academia, business, government, the international community and civil society.

Responses for the GRPS 2022-2023 were collected from September 7 to October 5, 2022, said the report.

The survey participants were asked: "Which five risks are the most likely to pose the biggest threat to your country in the next two years?" and were asked to select these from a list of 35 risks.

In Bangladesh, the Centre for Policy Dialogue was the partner of the WEF for the survey and rapid and or sustained inflation was selected as the most frequently selected risk here, according to the report which was released at a time when inflation was easing in recent months hovered around 9 per cent.

In December, consumer prices, which rose to a 10-year high in August, rose 8.71 per cent on point to point basis, according to the Bangladesh Bureau of Statistics.

"The year 2023 and 2024 are not looking bright," said CPD Executive Director Fahmida Khatun.

Fahmida said global inflation is a big challenge and Bangladesh will not remain immune from the price spike because of its import dependence. The pressure of imported inflation will be there. The cost of living pressure is going to stay here, she said.

Besides, the ratio of internal debt to Gross Domestic Product is increasing though the ratio of external debt-GDP remains low. But repayment pressure will increase, she said.

This year's Global Risks Report finds that cost-of-living crisis, natural disasters, extreme weather events and geoeconomic confrontation are the top three risks the world would be facing in the next two years.

Failure to mitigate climate change Erosion of social cohesion and societal polarization are the two major global risks for the short term.

"Cost of living dominates global risks in the next two years while climate action failure dominates the next decade," said the report.

The report said the return to a "new normal" following the Covid-19 pandemic was quickly disrupted by the outbreak of war in Ukraine, ushering in a fresh series of crises in food and energy – triggering problems that decades of progress had sought to solve.

"As 2023 begins, the world faces a set of risks that feel both wholly new and eerily familiar."

 "We have seen a return of "older" risks – inflation, cost-of-living crises, trade wars, capital outflows from emerging markets, widespread social unrest, geopolitical confrontation and the spectre of nuclear warfare – which few of this generation's business leaders and public policy-makers have experienced."

These are being amplified by comparatively new developments in the global risks landscape, including unsustainable levels of debt, a new era of low growth, low global investment and de-globalization, it added.

"Geopolitical fragmentation will drive geoeconomic warfare and heighten the risk of multi-domain conflicts."