The war in Ukraine, volatile European markets and currencies and challenges across China’s political and economic landscape are just some of the issues impacting almost every country around the world, including New Zealand. We are broadly an import economy, so this handful of issues playing out on the world stage is having a direct impact on our economy and on our businesses.
Domestic instability also on the rise
Political instability is leading to economic instability. Businesses are operating in a high-inflation, high-interest-rate environment – one that is extremely volatile and has ramped up very quickly. It is worrying that while the Reserve Bank and government both took actions last year to limit inflation, these have had no real impact.
Both external and internal costs are increasing as we see materials and people costs rising, resulting in margins becoming increasingly squeezed. Put simply, businesses are facing challenging times. And yet one-third of respondents to the BDO global risk landscape report said they are unprepared for the risks stemming from geopolitical tensions.
Focus on what you can control
