From recession scares to major disruptions in the worldwide supply chain, the 2020s have been a financial rollercoaster already. Discover the main factors that will be shaping the global economy in the remaining years of this decade, and how they might affect your life.
Recession risk
We started this decade in a global pandemic which paused trade and manufacturing for months. Just two years later, Vladimir Putin’s invasion of Ukraine disrupted the supply chain even further, reducing the amount of available gas and grain on the market.
These events caused inflation to rise worldwide as demand failed to keep pace with supply leading to a price hike in essential goods. This sudden increase in the cost of living brought many countries to the brink of recession.
While the global recession risk seems to have waned, it will be a careful balancing act for many countries this decade as they seek to strengthen their economies without rocking the boat.
Trade tensions
In addition to the European trade tensions brought on by Brexit and Russia’s invasion, the recent attacks by Houthi rebels on cargo ships on the Red Sea have caused further supply chain disruption.
The relationship between different countries has always been a swaying factor in the global economy, but in the 2020s it seems to have more weight than ever. The low-level tensions between the US and China could have a catastrophic effect on the worldwide economy in future years, especially if Donald Trump is re-elected as President in November this year.
Smart technology
While a possible recession and potential trade tensions are dynamic factors that are difficult to predict, the rise of smart technology is a certainty. From the way we interact with the global economy to the main players in the market, digital developments are reshaping the landscape on an almost daily basis.
For example, the stock market is at our fingertips thanks to investing apps from companies like Tradu which provide real-time updates and instant access to a diverse portfolio. The stock market itself is being driven by breakthroughs in artificial intelligence that are rapidly revolutionising all industries and leaving developing countries with less to invest behind.
Sustainability
With global warming ever-evident in catastrophic climate episodes such as wildfires and flooding, the international community is focused on sustainability. From homes and cars to the energy we use to power them, eco-friendly initiatives are driving economic transformation worldwide.
Old ways of working are being overhauled, with some roles becoming obsolete while green jobs are appearing. Investment in sustainable technologies is required in all areas of the economy, and there is a race to find the most cost-effective solutions to reach net zero carbon emissions.