Serbia, Companies are preparing for recession, there is no cheap money, News
Uncertain, uncertain, complex, that’s how the current business environment is described. Now it is completely clear what was meant by the warnings “that nothing will be the same again” that were heard during the covid crisis. Experts say that companies should understand that the old ways of solving the crisis are no longer effective.
In the past, the selection of a supplier depended on his willingness to deliver the goods exactly on time and to make the service as cheap as possible.
Today, three years after we saw what physical interruption of supply chains looks like, and then permanent disruptions, the main criterion becomes the reliability that the goods will reach their destination safely. Instead of the previously proclaimed globalization, regional integration is increasingly important.
“It is better to place our suppliers somewhere closer, that is, to buy from suppliers who are closer, who are within 48 hours by truck, than if they are far away. Those who are closer may cost us more, but we will have more reliable supply chains and we won’t have any problems in the supplier’s, so to speak, upward path of the supply chain, because it is always calculated what is more expensive, whether to stop production, which is always the most expensive, or to pay something even a little more, so we will still transfer it to the final prices as is happening in principle. It is a clear fact that the prices of some types of goods will never return to the period of two or three years ago,” points out Dr. Slobodan Aćimović, professor at the Faculty of Economics.
There is no more cheap money, but these are not the only changes in the financial world. In the past, it was enough for the company to provide guarantees that it would regularly settle its obligations. Now, a domestic bank, in accordance with the policy of its foreign headquarters, rejected the request because the project was not environmentally acceptable.
“This is what the trend of green bonds is telling us, which will be more favorable with lower interest rates. It means that companies in those sectors will be able to get the missing money more favorably, which means relatively cheaper sources of financing compared to some other sectors, but we don’t have, let me say , uniform standards rather than a selective policy. And this is what banks are already implementing, and they only receive impulses from central banks,” points out Zoran Grubišić, a professor at the Belgrade Banking Academy.
Both because of expensive energy sources and because of social responsibility, businesses are increasingly moving towards green.
“The consumption of Internet traffic is increasing tremendously every year, the percentage increases are in double digits. And as long as the need for more Internet grows, so will the consumption of electricity. That is why it is important for us to be independent in the way we obtain energy. In the last three months in In Serbia, we installed 4,000 solar panels on our base stations and we will continue to move further towards being even more independent, greener and reducing environmental pollution,” says Thomas Arnoldner, CEO of A1 Telecom Austria Group.
Tectonic disruptions are also occurring in the labor market and are posing a serious challenge to companies.
“Some kind of salary and some kind of functioning model simply no longer works. And in fact, I would say, the companies that profited the most were those that, how should I say, operated responsibly and provided flexibility and understanding to their employees. On the other hand, what is very clear and that’s what other researches are now saying, that is that people increasingly want to connect with the purpose”, emphasizes Uroš Milosavljević, director of KPMG.
Surveys show that companies are preparing for recession. Investment decisions are being reviewed, costs are being cut, money is being redirected and everyone is looking to maintain profit margins.
Experts, however, warn that those old models of behavior in a crisis will not give the desired result this time.
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