There is increased realisation that the global economy cannot easily withstand much higher inflation or higher interest rates and there is consensus that growth will be materially slower over the next 12 to 18 months, according to Oliver Salmon, Global Capital Markets Director, World Research, Savills
He adds that the challenging macroeconomic environment has led to significant tightening in monetary policy across all major bank major central banks and thus a repricing in debt costs and increased volatility across financial markets.
Meanwhile, one of the effects of Covid19 was the need to increase supply chain resilience.The adoption of a “just-in-case” philosophy has led to significant rebuilding of inventories across the G7 economies. This is helping to ease supply chain pressures and increase resilience to continued disruptions, Salmon said.
This near shoring process has other attractive characteristics such as greater compatibility with net zero than globalisation – global trade accounts around 20% to 30% of global carbon emissions and around 70% is tied up in supply chains.
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