(Bloomberg) -- Geopolitical flash points pose the biggest threat to the global economy and markets next year, according to a survey by Natixis SA.

“The biggest macroeconomic risk for 2024 is geopolitical bad actors who with one action can upset economic and market assumptions globally,” the poll of 500 institutional investors from around the world found. That ranked higher than risks related to declining consumer spending, central bank policy errors, and a slowing Chinese economy.

It’s the latest in a string of warnings that global tensions are abnormally high. Hamas’ Oct. 7 attacks and Israel’s retaliation brought geopolitical risks back into focus for many. That’s as the war in Ukraine is deep into its second year and investors are watching China’s ambitions. Markets are also on high alert ahead of key elections — including in the US — next year.

Read: From Wall Street to the World Bank, One Risk Towers Above All

“After seeing how the early stages of the Russian invasion of Ukraine drove big price spikes for energy and food in 2022, institutions have good reason for concern,” said a team at the Natixis Center for Investor Insight including Dave Goodsell and Stephanie Giardina. “The geopolitical landscape is looking less stable going into 2024.”

More tensions risk hurting a global economy already dealing with higher prices and borrowing costs. Research by Bloomberg Economics shows the economic cost of conflict this year is likely to be the highest since the end of World War II. A United Nations agency said Monday global trade will decline in 2023 by about 5%.  

Respondents to the Natixis survey mentioned China’s geopolitical ambitions, as well as the fragmentation between the BRIC grouping —  Brazil, Russia, India and China — and the West. They are also concerned about the growing alliance between Russia, North Korea, and Iran, which 70% believe will lead to greater economic instability.

Read: JPMorgan Sees Stocks Volatility Rise in 2024 as Risks Mount 

“Geopolitical risk is unlikely to diminish in any meaningful way, with the countries accounting for half of the global output holding elections during the year,” Pictet Asset Management analysts including Luca Paolini said in a note to clients last month. “2024 will be less of a banner year, which is why we are sticking to a defensive bias.”

Other findings of the survey include:

  • 72% of institutions worldwide, and 79% in North America, think a messy US election season will lead to increased market volatility
  • 51% of institutions say recession is inevitable — with recession expectations strongest in the US and UK
  • 61% of investors see the opportunities from artificial intelligence as greater than the risks. Three-quarters believe AI will unlock investment opportunities; still, 38% worry that AI poses “an existential threat to civilization as we know it”

©2023 Bloomberg L.P.