Business news from Ukraine

MORE THAN 60% OF TOP MANAGERS OF COMPANIES IN WORLD PREDICT RECESSION IN NEXT 1-1.5 YEARS

More than 60% of CEOs and other top managers of companies around the world are afraid of a recession in their countries in the next 12-18 months, according to a survey conducted by the research company Conference Board.
Another 15% of respondents believe that their economies have already entered a recession.
The survey shows a sharp deterioration in sentiment among CEOs around the world. At the end of 2021, only 22% of respondents in a similar study noted recession risks, at the end of 2020 – 39%.
As part of the study, the Conference Board interviewed 750 directors of companies from different countries. The survey was conducted in May, that is, before the recent increase in the Fed’s rate by 75 basis points at once.
Top managers named the consequences of the war unleashed by Russia in Ukraine, problems in supply chains and the situation with coronavirus in China, as well as rising interest rates, as the main negative factors.
In addition, directors are concerned about rising energy prices, causing an increase in the cost of transport services.
“Fundamental economic factors such as rising energy prices and the implications for the cost of goods and transportation services are very important,” said George Oliver, chief executive officer of diversified industrial corporation Johnson Controls.
On fears of a recession, some companies have announced a suspension of hiring new employees or even layoffs.
“There is reason to believe that we are entering a recession phase after a 10-year period of economic growth,” Brian Armstrong, head of crypto exchange operator Coinbase, wrote in a letter to employees. “The recession means another winter in the cryptocurrency market, which may turn out to be long.”
Earlier, Coinbase announced plans to lay off 18% of the state, or about 1.1 thousand employees.
At the same time, companies in the United States are also facing another difficulty – a shortage of qualified personnel. This is facilitated by very low unemployment, which reached 3.6% in March.
Meanwhile, consumer confidence remains strong, said Conference Board senior economist Dana Peterson.
“Consumers are less worried about a recession than CEOs,” Peterson said. “But CEOs are trained to look at a 12 to 18-month horizon, and for most consumers, the horizon is three to six months.”

, ,

BLACK SEA TRADE AND DEVELOPMENT BANK PREDICTS ECONOMIC RECESSION IN BLACK SEA REGION

The Black Sea Trade and Development Bank (BSTDB) predicts an economic decline in the Black Sea region of more than 5% of GDP in 2020 with a further recovery of 3-3.5% of GDP in the next two years, president of the bank Dmytro Pankin has said.
“What we know is that the Black Sea region (along with the rest of the world) is going to experience contraction in 2020, most likely in excess of 5%. However, due to the low base, we expect a rebound in 2021 and probably well into 2022, leading to growth averaging 3.0-3.5% in 2021-2022,” Pankin said in an exclusive interview with Interfax-Ukraine.
“Despite the contraction observed in 2020, there is still a robust demand for BSTDB financing, which our bank is happily providing, although the nature of the demand has changed. Many large-scale investments have been deferred, or even cancelled, and we are seeing more demand for direct corporate lending, and for support to SMEs through local financial institutions. We would expect this demand to increase as economies rebound in 2021 and 2022, in parallel to a rebound in larger investments and infrastructure operations,” the banker said.
“As we all know, relaxed monetary policies and expansionary fiscal policies have resulted in ample global liquidity, which benefits both developed and developing countries. As a development bank, we try to direct this cheap financing to real economic activities both in Ukraine and other countries,” he said.
“However, issues with political stability can inhibit or at best, postpone those investments. To fully take advantage of this ample liquidity Ukraine and all other countries need stability, working rule of law, good governance, and other related factors in place. This is particularly relevant for infrastructure investments,” he said.

, , ,