The World Trade Organisation (WTO) may stand corrected in its predictions for normalcy this year
Last October, WTO projected port congestions to ease this year. Unfortunately, the Omicron variant caused further trade bottlenecks worldwide from resumed border restrictions, and basically crushed every ounce of optimism in 2022.
Uncertainty is the theme
Robert Koopman, WTO’s Chief Economist said consumers skewed spending towards goods rather than services given they could not or preferred not to dine out or go on holidays. He added in the aspect of goods trade, excess demand likely explained two-thirds to three-quarters of apparent shortages. Yet he added, “I am pretty confident that in the next 3 or 4 months we are going to see the inflationary pressures being reduced,” referring to the majority of traded goods and assuming no new geopolitical or health shock.
Some companies have nonetheless warned that trade channels have become so clogged up it could be well into next year before they see business normalcy. CEOs of companies across various sectors reportedly told CNBC that any hope of a “return to normal” in 2022 is misguided, and volatility will remain a primary business challenge.
There was a survey conducted to assess the confidence about 2022’s outlook, and respondents were optimistic. However, the findings were before the emergence of Omicron. Shane Grant, CEO of Danone North America remarked he is very bullish going into 2022 on the core business, but does expect volatility to be a major theme. He said, “As we go into 2022, I think it is this theme of volatility, and not of one particular type. It is enormous volatility in our supply chain; everything from input availability, capacity, transportation, and labour.”
However, the most incriminating point came from Dr Marlow Hernandez, CEO of Cano Health. He said, “The pandemic is far from over and Omicron is (I believe) a real threat,” Dr Hernandez cited the number of mutations on the spike protein, that may make it more transmissible and resistant to vaccines and treatments. It is more plausible that things are not certain this year, and normalcy may have to wait.
Marine Online News Team
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