2022 will again be a big test for many companies. As Coface’s analysis shows, although companies in Slovakia expect better results this year than in 2021, the new alternative to the COVID-19 pandemic omicron also brings an increased degree of uncertainty.
While in 2020 to 2021 The government mitigated the effects of the epidemic with financial and legislative assistance For companies, resulting in surprisingly low levels of insolvency or insolvency, In 2022 there are many challengeson which management will also depend on the next state of the companies,” Jan Arnault, CEO of Coface for Slovak Republic and the Czech Republic stated.
Input prices are rising
The state of companies last year, as well as government measures to combat the epidemic The global effects of coronary artery crisis were also marked. Although in the second half of 2021 There was a sharp recovery in the economyCompanies have suffered a lot Input price hikesor with complete unavailability. “Acceptance of higher prices, given the similar situation across the market, is good, but generally acceptable with some delay and As prices rise, demands on working capital increaseThe expert notes.
According to him, Slovakia has an advantage thanks to its membership in the Eurozone, where they are Base interest rates were held at zerobut the tax on these low interest rates high inflation. Neighbors outside the eurozone are already raising interest rates extraordinarily sharply, which continues to make the necessary financing more expensive.
“It’s for businesses with low margins It is difficult to absorb such an increase at almost all costs Thus their negotiating position towards business partners is generally weak,” notes J.
Problematic supply chains
However, supply chains are also a problem, with China playing a major role. However, as it turned out, Chinese vaccines have no effect on the omicron variant. “China is likely to continue fighting the virus with a lockdown. At the same time, China accounts for a third of global exports, which are still entering supply chains, and the development of Chinese GDP is largely reflected in global GDP,” he explains.
Short term help will not help
Therefore, given the ongoing pandemic and the new boom, he warns that short-term solutions by the government will no longer help businesses. “due to low vaccination In Slovakia there will be COVID-19 with its capabilities cripples health care It’s still a big problem. So it will be the role of the government Increase this vaccination to settle when No restrictive measures will be requiredHospitalization and quarantine They will not paralyze the administration of the state or private companies,” notes the need to strengthen healthcare.
The second challenge, he says, is rising inflation, as the government has the potential for a partially accommodative monetary policy Offset by more restrictive fiscal policies. “Low unemployment and strong macroeconomic developments despite the pandemic are a good thing Chance for repairs long-term Increase competitiveness Education, digitization, the pension system, or energy. Exclusively short-term support programs should offset government restrictions on the coronavirus, Broader short-term stimulus is unnecessary at this time On the contrary, it only contributes to higher inflation.”
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