Pandemic and supply problems, great challenges for companies in 2022

The COVID-19 pandemic and problems in global supply chains are the great challenges identified by companies globally for 2022, according to the Global Economic Survey published today by Eurochambres, which represents European chambers of commerce.

They are followed, by far, by political instability, the price of raw materials, the tightening of financing conditions or fiscal crises; and the increase in inflation, according to this report, prepared with the collaboration of the Global Platform of Chambers of Commerce.

“Despite a strong global growth rate of 5.9% in 2021, recent setbacks in the fight with the pandemic coupled with supply shocks have affected the economic outlook of the international business community,” the document said.

COVID-19

The president of Eurochambres, Christoph Leitl, explained in an interview with EFE that the evolution of the virus is the “main concern” of European companies and called for a “global health plan” to tackle the situation.

“It is not just about who is vaccinated in Spain, Austria or Germany, but who is vaccinated throughout the world; we need a global health plan organized by the G20, ″ he suggested.

Leitl went on to add that a “global mix” is necessary because, currently, “each continent goes its own way” and it is vital “to meet the demands of those countries that cannot afford vaccines alone”.

The duration of the pandemic has undermined growth expectations for many companies, although these remain “slightly positive,” according to the report.

The most pessimistic are those from Southeast Asia, China and Russia, while in Europe, Latin America, Turkey and the Gulf region they are somewhat more optimistic.

Supplies and power

In addition to the pandemic, they weigh a global supply crisis that “will probably persist into 2022.”

To address this problem, the companies consulted advocate intensifying multilateral cooperation to anticipate crises and better plan, as well as providing financial incentives to facilitate trade in raw materials and intermediate goods.

However, they do not consider a priority to reduce tariffs on exports of raw materials from third countries.

The president of Eurochambres adds to these issues the high energy prices and stresses that “the answer” to this phenomenon should be based on measures to “strengthen and increase green technologies and renewable energies.”

In a line similar to his proposal for the pandemic, Leitl advocates articulating a “global plan on energy supply” with the aim of preventing energy prices from continuing to have an impact on world economic growth.

Companies, which anticipate that prices will continue to rise in the “near future”, also insist on the need to increase resilience in the face of the volatility of commodity prices seen in 2021.

Financing and taxation

On the other hand, they also fear vulnerability in financial markets if there is a “sudden withdrawal of expansionary monetary policies”, as well as a rise in borrowing costs or difficulties in accessing foreign direct investment.

On the tax side, they are concerned about the application of the international tax agreement sealed in the OECD, which establishes a global minimum rate of 15% for corporate tax and that companies must pay taxes in all countries where they do business on the one hand of their benefits, even if they are not based on them.

They point out, in particular, that there are no tools to ensure compliance with the rules and no dispute resolution mechanism.

The companies also ask the governments to continue taking measures to support employment.

To sum up, the president of Eurochambres calls for “a global political framework” sponsored by the G20 that responds to problems on an international scale.

“We live in a global society and a global economy and we need a global political framework. That is why we ask that, please, no summits be held with general conclusions, that they be concrete and agree on the measures we ask for, “he said.