Fighting the inflation.

Byline: Rashid A Mughal

WORLD presently is passing through extremely difficult times, never seen before in history, mainly due to Covid19.

It is absolutely right to say that 9/11 and now Covid19 has changed the entire landscape of our globe.

But the Covid19 aftermath and the shock waves it generated are much more lethal, deadly and long lasting as is evident from the present state of global economy.

With inflation at a 40-year high and multiple shocks disrupting the financial and business landscape, companies are re-examining business models and developing new strategies for accelerating top line growth, protecting the bottom line and planning for unpredictable exogenous factors.

The COVID-19 pandemic and the war in Ukraine have caused significant disruption to supply chains as well as economic losses.

Supply chains are critical to European growth so solving any issues that impact them is vital to rebuilding economies post-pandemic.

A supply chain reinvention is required to make them more resilient and future ready as a new economic order takes shape.

The combination of COVID-19 and the war in Ukraine has the potential to significantly impact Europe's economy.

Despite expert consensus being that Europe will avoid recession this year, the war is expected to cause a material deceleration in growth.

During the pandemic, we had already faced significant supply chain disruption and, before the Ukraine-Russia crisis, expected some kind of normalization in 2022 and partly 2023 for specific products.

According to Jean-Marc Ollagnier, CEO of Accenture Europe, resurging demand and precautionary hoarding overwhelmed supply chains, with bottlenecks undermining the rebound in industry.

In Germany, car production in the first months of 2022 was down 32% compared to 2019 due to chip shortages.

Also, transportation bottlenecks have aggravated input shortages and sent costs skyrocketing.

For example, container shipping rates remain 10 times above June 2020 levels and added to the lack of material and breakdown in logistics.

Labour shortage, which prevail across manufacturing, construction and logistics, also pose longer-term challenges.

Europe's HGV driver shortfall, which has reached 425,000, gives a sense of the problems organizations face.

The pandemic was slowing growth before Russia's invasion, with disruptions costing major economies pound 112.75 billion in lost gross domestic product (GDP) in 2021 with inflation climbing in geometrical progression.

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