Although corporate executives are optimistic about the state of the world economy and are increasingly buoyant about trade levels and economic conditions in their home countries, they are also increasingly worried about the threats of geopolitical instability and terrorism to the global economy, according to the latest survey by McKinsey.

Geopolitical instability is a top risk to global economic growth according to 65 per cent of the survey's respondents – up from 50 per cent in the previous March survey. The other top three risk are transitions of political leadership and changes in trade policy. The graph below shows that executives are now more likely to identify terrorist attacks as a threat to long-term global growth.

The executives in the survey were also more optimistic about the world economy’s long-term prospects than they have been in previous surveys. The graph below shows that executives in India and Europe are the most bullish on the current economic conditions.

The survey also found that the balance has shifted globally in terms of expectations for trade, with a growing percentage of executives in developing economies reporting increasing trade levels, compared to previous surveys.