2022 has triggered a unique set of challenges that are already causing major disruptions to business. Considering aggressive bank rate hikes to control inflation, the lingering war, and other downside pressures, the global economic sentiment has become weaker still, with growing fears of a global recession.
According to Frost & Sullivan estimates, global growth is expected to slump from 6.1 % in 2021 to 2.8% in 2022 and further drop to 1.8% by 2023. Under the baseline scenario, Frost & Sullivan does not envision a global recession, although negative GDP growth is expected to Q1 2023. Our thought leadership expounds on visioning scenarios for more aggressive and critical conditions, further complemented by recession exposure versus resilience analysis for major economies and key industries, including the automotive, healthcare, and energy industries.
Increasing cost of borrowing, shortage of human capital, rising energy prices and supply chain bottlenecks are eroding profit margins, making growth targets harder to achieve. For small businesses, this could mean several years of below-average growth in the short term, or even risk of closure. Against this evolving backdrop, Frost & Sullivan has identified the top 10 major risks that businesses must consider in the short term to build a holistic mitigation strategy.
1. Stagflation risk
2. Supply chain disruption
3. Geopolitical instability
4. Data privacy and cyber risks
5. Mental well-being
6. Contagious diseases
7. Extreme weather events
8. Global talent shortage
9. Energy market uncertainty
10. Nuclear advancement risk
To navigate through these uncertain times, Frost & Sullivan recommends building a solid understanding of the short-term economic outlook and developing a sound risk strategy to acutely assess these market risks, with an objective to drive dialogue and engage in periodic risk assessments that will help you not just survive – but thrive – in a distressed business environment.
To learn more, refer to our thought leadership below:
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