IATA report lists US mid-term elections among 22 risks to global economy in 2026

The International Air Transport Association (IATA) has released a report assessing the overarching risks to the global economy in 2026 in an effort to “promote awareness and stimulate conversation”.

The report published on December 28, 2025, includes a matrix listing 22 potential risks with respect to their likelihood of occurrence and the extent of their possible negative impact on the global economy.

According to IATA, climate change and its associated physical risks and costs pose the highest negative impact alongside being the most likely to occur.

“Climate change is and will continue to disrupt lives, livelihoods, and productivity around the globe. Extreme weather, commodity price swings, supply chain stresses, etc., can affect agriculture, infrastructure, global trade, and investment flows,” said the report.

It added: “A successful energy transition requires stable policies and reliable financing. In an unstable environment, assets can be left stranded, and opportunities can be missed, slowing progress and harming growth in some regions.”

IATAPolicy fragmentation is also an area of concern for IATA, after decades of trade liberalization now being replaced with a more fragmented trade order.

“In global civil aviation we can see an increase in national and regional policy initiatives that depart from ICAO’s 80 years of global harmonization,” said the report.

IATA highlights “competing frameworks for addressing CO2 emissions from air transport limit progress in this area and fragmented taxation”.

The IATA report also lists the US mid-term election on November 3, 2026, which could give the Democrats a majority in the House of Representatives. IATA says this would curtail the legislative capacity of the President Donald Trump’s administration.

“The risk of turmoil around the election and it possibly being contested is present,” said IATA.

IATA points out that this could lead to further instability surrounding the need to extend the debt ceiling, likely to be necessary in November 2026.

“Failure to extend the debt ceiling would risk the US defaulting on its debt payments, which low likelihood scenario would have catastrophic consequences and trigger a global financial crisis,” said the report.

Among the other largest risks likely to occur are geo-political tensions, higher military spending, cyber threats and AI, trade wars, inflation, supply chain disruptions and China’s property crisis.

To read the full report briefing, you can visit IATA’s website.

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