Six Global Issues to Watch in September 2026
GLOBAL DEBT FEARS
With federal debt in the United States surpassing the $40 trillion mark (123% of GDP), the world was reminded of how public debt has risen to unsustainable levels in recent years. This is not just an issue for the US, as six of the twelve largest economies in the world now have public debt exceeding the size of their economies. At the same time, private-sector debt is soaring as well, with the Chinese property development sector a prime example of this. With interest rates well above the levels of previous years, and with growth proving sluggish for many economies and businesses, this debt is becoming increasingly difficult to manage. Looking ahead, it is clear that without major tax increases (which appear very unlikely) or major spending cuts, many countries and businesses will be facing debt crises that could prove very destabilizing for the global economy.
IRAN CONFLICT DRAGS ON
The conflict involving the United States and Iran has entered its sixth month and there is still very little clarity as to where this conflict is headed. Periodic clashes between the combatants continue to break out, with both sides appearing to be trapped in what most view as a senseless conflict. The Trump Administration does not appear to have a plan to end this conflict, while Iran’s political and military leadership appears to be deeply divided over what its aims are in this conflict. What is certain is that the longer this conflict continues and traffic in the Strait of Hormuz remains disrupted, it will be the global economy that pays the price. Most notably, it is consumers who are paying the price for this conflict in the form of elevated inflationary pressures.
ENERGY SUPPLIES AND PRICES
With the conflict in the Middle East continuing, there are growing concerns about global energy supplies. Oil and gas exports through the Strait of Hormuz and the Bab El-Mandeb continue to be heavily disrupted by Iran and the Houthi rebels. Meanwhile, China’s dramatic reduction in consumption in recent months could come to an end. Finally, the United States and many other countries have dramatically reduced their strategic petroleum reserves to their lowest levels in recent decades. As such, unless there is a major increase in oil supplies in the coming weeks, oil prices could soar to their highest level in years. Should this happen, it would fuel a new round of inflationary pressures around the world and result in a significant reduction in global economic growth in the final months of 2026 and perhaps well into 2027.
RELATIONS BETWEEN CHINA AND INDIA
China’s President Xi Jinping will travel to India this month to attend the summit of the BRICS group of countries in New Delhi. This will be President Xi’s first trip to India in seven years. Ties between the world’s two most populous countries remain severely strained and much has changed since the last time President Xi was in India. The two countries are facing different economic challenges, with China’s economy slowing significantly, and India facing mounting external pressures. The border disputes between the two countries have eased, but have not gone away. Beijing wants to ensure that India remains neutral as it seeks to expand its control over more areas of the Pacific. New Delhi wants China to reduce its defense and economic support for Pakistan. With so many disagreements, the level of distrust between these two giant countries is likely to remain very high.
ELECTION WATCH
There are several key elections taking place around the world this month, as well as some important campaigns for elections later this year. In Russia, elections for the Duma will be strictly controlled by the Kremlin, but Russian voters might have an opportunity to voice their anger at the war in Ukraine. Meanwhile, parliamentary elections will take place this month in Morocco and Sweden, with issues involving migration playing an important role in both countries’ elections. In the campaign for Brazil’s presidential election in October, President Lula Da Silva continues to hold a small lead over his right-wing opponent, Flavio Bolsonaro. Finally, campaigning is in full swing for the all-important midterm elections in a highly polarized United States, with the Democrats hoping to win control of one or both houses of the US Congress.
THIS YEAR’S EL NIÑO GAINS STRENGTH
The most powerful El Niño in at least 70 years is underway in the Pacific Ocean and its impact is already being felt in many parts of the world. For example, global sea temperatures have reached their highest levels in centuries, while India is experiencing its weakest monsoon season in at least 15 years and South America is dealing with highly uneven rains. Still, the peak of the El Niño’s impact on the world’s weather will not be felt until November, and its effects could persist until early 2027. This could lead to even more severe weather-related disasters in the months ahead. Furthermore, this year’s El Niño is likely to have a major impact on the global economy. In particular, food prices are likely to rise even further in the months ahead, adding to the already considerable inflationary pressures that have been plaguing many key economies and industries.