Economic fragmentation

Economic fragmentation occurs when different regions or countries become less connected and integrated in their economic activities. This can happen due to political tensions, trade barriers, or technological differences, leading to isolated markets that trade less with each other. As a result, economic growth slows, supply chains become disrupted, and businesses face higher costs. Essentially, it’s like a once-cohesive economy breaking into smaller, less interconnected pieces, which can undermine efficiency and global cooperation. This fragmentation hampers overall economic development and can create disparities between regions.