The economic world is changing, can you keep up? EY’s Up To Speed 2023 event

From an economic standpoint the year 2023 was nothing short of extraordinary, especially at the back of the pandemic. But the outlook for 2023 reveals a number of challenges lay ahead. 

Inflation is expected to continue affecting the global economy in the coming year. Higher inflation can have a number of impacts on businesses and the economy as a whole. One potential consequence is an increase in costs for businesses – in terms of rising raw materials, labour, and other inputs - which deal a blow to projected profitability and competitiveness.

What’s to come?

To mitigate this impact, businesses will need to adjust their pricing strategies, find ways to reduce costs, or explore new revenue streams, and above all, be open to change and flexibility.

Inflation can also erode purchasing power for consumers, leading to affordability concerns and decreased demand (lower demand and/ or substitution effect) for goods and services. To counter this effect, businesses may need to take on a customer centred approach to better meet the needs and budgets of consumers.

Central banks have been responding to higher inflation by raising interest rates in an effort to stabilise prices. This can impact borrowing costs and economic activity, potentially slowing down growth. Businesses may need to consider the potential impacts of higher interest rates on their financing and investment decisions.

One thing is clear, managing the potential impacts of inflation on the economy and businesses will be key in the coming year. By carefully monitoring and responding to changing economic conditions, businesses can position themselves for success in the face of uncertainty.

Apart from its health toll, the pandemic brought about economic turmoil and related uncertainties, but did not slow down the pace of transformation. While our societies, firms and economies are constantly evolving, the last few years have brought about a call to transform and transition to better processes and outcomes.

This need for change has been spurred by various occurrences (economic and financial crisis; man-made disasters; political turmoil), and the pace has been hastened through technological developments and increased connectivity and communication.

To many, this transition can have a different meaning – whether it’s embracing technological upgrades or restructuring towards more efficient or social models.

It could also include more environmentally focused measures like adapting to climate change and prioritising environmental protection and the better use of resources be they natural, man-made, or human.

Or it can come from a change in perception through the embedding of circular economy principles, a shift into long-term focus that drives long-term value and long-term planning and looking at growth beyond GDP.

To successfully manage such changes, organisations will need to apply strong transition management processes. These include proper communication within the organisation about the need for change, and gathering input from those impacted by the transition to understand its effects and gain their buy-in.

Assessing the organisations’ readiness for change, its human impact, and educating leaders how to manage and monitor the transition are tools to ensure that effective change is made.

Adding to this in order to guarantee a smooth and successful outcome is monitoring the progress of individuals as they go through the different stages of the transition, and helping individuals understand how they can positively contribute to the change and the importance of their role in the organisation.

Get your board UptoSpeed and ready for 2023

Wrapping your head around all these changes which seem to be happening so quickly can often be a trial but that’s where EY Malta aims to help.  EY’s UptoSpeed is back in physical format for 2023. Covering a broad spectrum of business areas, this event is a unique opportunity to get up to speed with the latest developments that are expected to shape the business landscape this year, and beyond.

EY’s UpToSpeed will take place on Friday 27 January, at the InterContinental Hotel, and apart from an economic update, it will also include a financial reporting update by Shawn Falzon, EY’s Assurance Leader, a tax update by Dr Robert Attard, EY’s Tax Leader, an update on sustainability reporting by Dr Kathrin Kutlescha, EY Sustainability Manager. Spaces are limited so make sure to register your seat at https://www.ey.com/en_mt/events/uptospeed-2023.

Chris Meilak is an economist and leads EY Malta’s economic advisory services. He will co-present, together with other EY experts, during EY’s annual Up To Speed event, which will take place on 27 January 2023 at the Intercontinental Hotel, Malta.