It is now a decade since the Global Financial Crisis ground to its conclusion – but the start of 2019 has been served up with a fresh dollop of VUCA that the nation’s CFOs will have to digest as they navigate the year ahead.
The international extent of Volatility, Uncertainty, Complexity and Ambiguity was made clear in January at the World Economic Forum meeting in Davos.
According to the International Monetary Fund (IMF), global expansion has weakened already and more lies ahead. Global expansion cooled to 3.7 per cent last year and is expected to fall to 3.5 per cent this year as the US/China trade war takes hold and the world grapples with the impact of a potential no-deal Brexit.
With the global figure propped by developing nations’ often much faster growth, the growth in advanced economies is more sclerotic according to the IMF which is predicting the 2.3 per cent growth rate developed economies enjoyed in 2018 will drop to 2 per cent in 2019 and 1.7 per cent in 2020.
Australian GDP growth meanwhile stands at 2.8 per cent, unemployment a low 5 per cent. However corporate tax rates remain stubbornly high compared to other nations – third highest in the world according to the Business Council of Australia – and with a Federal Election looming just about everything is in play.
From an international perspective, according to the IMF, looking ahead; “the main shared policy priority is for countries to resolve cooperatively and quickly their trade disagreements and the resulting policy uncertainty, rather than raising harmful barriers further and destabilising an already slowing global economy. Across all economies, measures to boost potential output growth, enhance inclusiveness, and strengthen fiscal and financial buffers in an environment of high debt burdens and tighter financial conditions are imperatives.”