What’s Holding Back The World From Economic Recovery?


Many people subscribe to the idea that we’ve been through the worst and that it will only be a few more months until the world economy shoots back up and rebounds to pre-pandemic levels. However, now that we’re at the dead center of the 2nd quarter for 2021, it seems the economic recovery that many of us had hoped to happen by now is delayed and has been on an indefinite postponement for the past few months at least.

As a result, the general population has grown weary of the entire global situation of the world markets and fear that we are in for another rough year ahead since the little progress we’ve garnered has amounted to a minuscule effect on the global scale. So, today we will be exploring just what’s holding the world back from economic recovery and how businesses are expected to respond moving forward in 2021.

Worse Than Expected NFP Employment Change

Firstly, one of the most recent news that has dampened the optimistic outlooks of many investors and financial analysts is the recent jobs report for April that came out worse than expected NFP employment change. Many had hoped for job creation to have gained a foothold in the re-emerging markets now that vaccination rollout programs are in progress. Still, the numbers we’re off by more than 700,000, and investors fear that this is an indicator for a prolonged recovery.

Many families lost their livelihoods due to layoffs and bankruptcies caused by the initial outbreak of Covid-19, and throughout the year 2020, nearly everybody was struggling to keep their finances together. And with the most recent jobs report for April showing the economy’s inability to resolve the current unemployment rate, it’s no surprise why many people expect more bearish market movements.

Fear Of Sudden Inflation Intensifies

Secondly, with current constraints on global supply chains still felt across the world and production capacities unable to meet the rising global consumer demand, the fear of sudden inflation has intensified over the past few weeks. And despite some cities already at the forefront of America’s economic recovery, the threat of an inflation rate spike could signal more uncertainty with the risk of economic collapse.

Likewise, many experts argue that this pessimistic outlook on market trends lean toward a worst-case scenario. Considering efforts to avoid this at all costs, we can exercise some relief that this won’t occur. However, we can’t deny that the fear of inflation is very much felt and has persuaded would-be investors to maintain a risk-off approach.

New Regulation And Policy Moving Forward

Last but not least, new regulations and policies are expected to arrive as the global pandemic introduced new shortcomings and flaws within the current system, and while this is normally seen as a positive, any form of change always sparks uncertainty. Therefore, if any newly enacted policies limit the available opportunities to businesses, this would create unintended drawbacks that will slow down any potential for economic recovery.

What Must Companies Do To Survive?

With all things considered, long-term resilience is the short-term goal for businesses across all industries, and while the objective is difficult under such a short time frame, it is not impossible. Therefore, businesses are expected to shift their focus and resources onto establishing their ground in the markets and bracing for any unexpected economic turbulence brought about by the lack of economic recovery.

  • Future-Proof Your Operations: From an expansive digital migration to the adoption of hybrid workplaces, businesses must future-proof their operations if they wish to thrive in this new normal. And given that remote work is here to stay and that most consumer demand is found online, these two objectives are excellent places to start.
  • Safeguard Your Business Finances: If the previous year were to be of reference, then we know just how important safeguarding your business finances and cash reserves are to keeping your company afloat. So you must value strategic partnerships with fellow companies to keep your expenses low and come to advantageous agreements with your chosen money lending and financing services if the need for immediate cash arises.

Navigating The Changing Business Landscape

Overall, we are currently in one of the most transformative business landscapes of our time. Navigating through this new normal will require extra effort and research on the part of businesses both big and small to remain in operation. And with the chances of economic recovery still low, we can’t afford to keep waiting. So, don’t let the wave of news swallow your company whole, and take action ASAP before it’s too late.

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