Global businesses see declining COVID-19 risks

MANILA, Philippines — Global business sentiments have shifted at the start of the new year as businesses now see diminishing risks from COVID, but concerns about monetary policy have increased, according to the latest Global Risk Survey of UK-based think tank Oxford Economics.

“The potential impact of higher inflation on monetary policy and financial markets is now a more prominent concern,” it said.

The flash survey was completed by 168 businesses across sectors largely on financial institutions, industrial manufacturing and materials, and real estate, real estate finance and infrastructure.

The think tank noted that the survey showed a mixed picture.

Currently, the threat of inflation triggering market turmoil has now become the top near-term downside risk, while concerns that central banks may tighten prematurely have also risen.

Businesses expect global inflation to hit 4.5 percent in 2022.

Against this backdrop, more than half of the respondents at 55 percent said they view risks heavily to the downside and only a third see risks as balanced.

Also, only few are expecting an early end to supply-side disruption, and almost one in every five businesses now expect disruption to persist beyond 2022.

For this year, businesses are still expecting a more moderate rebound in global economic activity at 3.6 percent, the same forecast in the previous survey.

Further, high debt levels and climate change are seen as key medium-term risks. Also included are geopolitical risks, a plunge in asset prices, repeated COVID waves, and disappointing recovery in many emerging markets.

Amid speculation of a pandemic endgame by some economies, Oxford said upside hopes are now perceived to rest mainly on economies learning to live with the virus.

“This could have implications for consumers’ willingness to run down savings accumulated during the pandemic, which continues to be seen as a major potential upside,” it said.