Every country is now raising interest rates one after another.The world is interrelated and linked, one country change will trigger chain-reaction, in particular from those who possess global influence. Now we have the European Central Bank raising interest rates for the first time in 11 years by a larger-than-expected amount too, joining other major central banks in the world to combat hyperinflation.
WIth this move, it makes credit more expensive and for sure will slow down the economies resulting in recession and serve to balance act inflation or hyperinflation as you notice for the accelerated rate hike in some of the countries in the world.
The uncertainty variable is now interplay, and what the impact is for the second half of 2022 and beyond. Global recession is coming, the hyperinflation pressure can be noticed from most of the world’s countries.
WIth the credit harder to get and more expensive too to get, it impacts economic growth, making the global recession outlook more likely than before. From both the consumer and business, what is the likely strategy to make in the uncertainty near future? Cut back from the unnecessary spending, postpone major spending, to downsize and chop-off from the money losing business, all is what we expect to see. Merge, sell off and acquisition is expected.
From the technology end, we most likely expect to postpone capital expenditures (capex), and focus on more flexible pay-as-use types of subscription services. The world transition toward fourth industrial revolution (4IR) industry 4.0 is accelerated by the COVID-19 pandemic. We can see a lot of enterprises undertaking digital transformation projects and initiatives, yielding a variety of returns. Where it is much better than those who are passive and reactive and expect the world to suddenly change to their favor. Great company is one regardless of whether it is a good turn or a bad turn for the business cycle. Continue to know what needs to be done and keep doing what is right.
From the research findings, for those who “voluntarily” resign under the great resignation era under the various names, it is not surprising most of them can not get the position back to the previous peak income earned. Some of the people still do not see the various forces that interplay, global recession and the advance in the technology will result in the automation and AI robotics, which require much smaller workforce at the same time yield for higher productivity then before. Financial crisis now happening in Sri Lanka, and other high debt ratio countries, may trigger the domino effects, resulting in the overall demand and supply change. It is time to well prepare for the self half of 2022 and beyond, what else will surprise the world.
E-SPIN Group in the enterprise ICT solution supply, consultancy, project management, training and maintenance for corporation and government agencies did business across the region and via the channel. Feel free to contact E-SPIN for your project requirement and inquiry.
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