Video | Webinar Recording

    Now & Next: Global Economic Outlook – How Are Changes in the Economic Climate Affecting Trade, Investment and Funding for Businesses?

    October 2024
    Region: Europe
    Featuring:

     

    Key takeaways from our most recent Now & Next webinar include:

    • What is happening in global trade? Following decades of hyper globalization, governments have pushed to reduce reliance on single foreign suppliers. Nearshoring and reshoring will continue, focusing on sectors such as electric vehicles and chips. Geopolitics, sanctions, export controls and protectionism are driving measures taken to protect economic security at the national level. 
    • How are governments managing international trade? There is a restrictive and protectionist wave in different forms. On the restrictive side, there has been an increase in sanctions and export controls, many driven by geopolitical events. On the protectionist side, tariffs have been implemented or increased as trade defense measures.
    • Could the upcoming US elections have a global economic impact? Either result will likely have a strong America first element. Protectionism and US trade policy will remain uncertain regardless of the outcome. New tariffs could have inflationary consequences, but the true impact depends on whether there is trade diversion and the structure of future tariffs.
    • How are financial markets viewing government-driven transitions to global trade? There is continued uncertainty and volatility in the market. The era of cheap money has ended, leaving lenders and borrowers having to adapt. Banks are more cautious, imposing more stringent credit conditions. Corporates and sponsors must look for creative solutions in their capital structures to increase liquidity. 
    • Have the central banks squeezed out inflation, and what does that mean for interest rates? The Federal Reserve, the European Central Bank and the Bank of England have started to cut interest rates, and a number of other central banks have implemented or accelerated their easing plans. However, there is uncertainty stemming from spiking oil prices, elevated shipping costs and tariff risks. Overall rates will be at a higher level than after the Global Financial Crisis, so will not return to really low levels.
    • How is trade adjusting to the shifting geopolitical context? Companies are changing their strategies, for example diversifying their supply chains and reassessing their market access strategies, while nearshoring is becoming more popular among European companies. Sustainability and ESG regulation will impact supply chains and company strategies when relocating or selling to existing markets. Many countries are adapting to new and existing sanctions when doing business with sanctioned countries, in a secure way, in line with sanctions. 
    • What should businesses consider when thinking about risks in the global economy? The US elections could be a gamechanger, along with current conflicts and geopolitical tensions across the globe, which could spike energy prices, disrupt logistics and trade, and result in supply chain frictions, leading to unnecessary costs. There is a lot of uncertainty, so businesses should prepare for different scenarios and plan how to navigate uncertainty. 

    Featuring

    Matthew Kirk London
    José María Viñals Madrid | Brussels | Geneva
    Paula Laird London

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