My dear people, January has already flown by! The business community is warming up for 2022 in the hope that the COVID-19 pandemic is finally coming to an end and that those who calm us are right that the awakened inflation is of a temporary nature. Meanwhile, the team from the IMF has lowered its global growth forecast to 4.4 percent, which is 0.5 percentage points weaker than in previous forecasts. The course of the pandemic is assessed as uncertain, inflation is rising, supply disruptions are still present, and monetary policy in the U.S. is tightening. This should also be added to the unrest due to the escalation of political-military relations between America and Russia over Ukraine.
When everything is summed up, for members of the business community in Croatia, this would mean entering a year with a rarely seen combination of uncertainty. What must be certain is that we are entering a phase, if not a recession, then certainly a slowdown in the global economy, and then, with a delay in phase, also domestically. Instead of the desired recovery from the pandemic recession statistically represented in the shape of a V it is increasingly certain that the graph at the end looks like it is halfway to ultimately ending up in the shape of a W. Thus, a double recession. An extraordinary pandemic and a delayed cooling of the global economy every seven to ten years, in line with the cyclical movements of the capitalist economy.
Collision of Opportunities and Dangers
Currently, when it comes to Croatia, opportunities have not yet disappeared, and dangers have not yet struck with full force. Demand in many sectors is such that it is barely being satisfied, EU funds are at every turn, bankers are more easily granting loans (a topic in this issue of Lider), there is no serious decline or bankruptcies, and payments are more or less kept within usual deadlines. Exporters are doing their job, and hope for the tourist season has not yet been clouded. The dangers, sublimated in inflationary pressures, have not yet multiplied. However, every reasonable entrepreneur and manager knows that with the spring warming, economic cooling will begin. In the business community, exhausted by a two-year pandemic, anxiety is rising. But given that business anxiety is a constant here, a significant portion of companies will likely be somewhat prepared to face the blow in a tactical sense.
We are masters of finding ways to survive. We are poor, with exceptions, in separating part of the management capacity in a crisis to deal with what will ensure maximum exploitation of opportunities when the cyclical crisis begins to subside and transitions into a phase of recovery and boom. Here, the management of developed Western countries proves to be more capable than our local average. Partly because they operate in more organized states where there are not so many bureaucratic obstacles. The likely cooling of the economy will be a test for entrepreneurs and CEOs to see if they gathered and preserved middle management during good times (before 2019) and in the pandemic, which will be capable of operationally handling daily challenges. Or do they have a team of budget managers whose capacity and habits are reduced to routine attempts to fulfill the annual plan related to their departments.
