How 2022 Changed Business and Personal Finance

2022 has so far proven to be a tumultuous year, even by the stormy standards set by the last two.

With Russia invading Ukraine, global supply chains being heavily disrupted on the back of Covid lockdowns, and inflation running rampant as well as fast-rising interest rates, it’s been a year of special change in the world of personal and business finance.

Impact of 2022 So Far

Of course, few events have had as big an impact as Russia’s unprovoked war of aggression. It’s prompted leaders in Europe, which has been reliant on Russian gas, to rethink their energy strategies moving forward. Germany in particular has drawn criticism.

In the wake of the Fukushima disaster in 2011, it decided to downsize its nuclear industry over fears similar incidents might occur to them. This left it wholly dependent on imported gas from Russia. A weakness that has been unsurprisingly taken advantage of by the Kremlin when the opportunity presented itself.

Very recently, we’ve seen the country seize control of the German subsidiary of Rosneft, a Russian oil supplier. More broadly, we’ve seen a substantial rise in the amount of money plowed into clean energy sources, with 2022 looking set to eclipse all records.

The issued of green bonds, designed to finance low-carbon infrastructure and renewables, is sure to be significant.

Why Careful Investing is Crucial

Warren Buffet’s 6 Rules Of Investing (? Credit:

With the global economy teetering on the brink of recession, it’s never been more important for investors to tread carefully. Even if the situation in Ukraine resolves itself shortly, investors have received their reminder of just how unpredictable markets can be.

Just think about how often crypto is mooted as a serious option, compared to just six months ago.

Rather than trying to anticipate events and stay ahead of them, investors might pursue the more realistic ambition of trying to dilute risk using a diversified portfolio. This might mean thinking in the long term and keeping a little bit reserved in cash.

The appeal of investing in renewable assets, gold, and equities might be considerable. This is especially so during a period of high inflation. For many, outsourcing strategy to a dedicated investment management service might be the easiest way to manage risk.

Especially if you’re looking for a degree of peace of mind and be able to focus on other areas of your life while your assets work for you, rather than actively study market conditions and try to do everything yourself.

Also Read: 8 Things to Consider Before Investing in a Franchise

2023 Outlook

So, what does the future hold in 2023? We must start with the caveat that no one knows.

The Covid-19 pandemic was not anticipated until literally a few weeks before it arrived, and many commentators were still skeptical of the possibility that Russia might make good on its pledge to invade its neighbor, even as tanks were massing on the border.

With that said, it’s still worth looking at forecasts and taking stock of existing forms of risk. The Covid-19 pandemic, while it might seem like a period of history from which we’ve emerged, is still a major factor across much of the world.

It has however become less of a threat since the rollout of vaccines and other measures taken to mitigate the damage it would cause.

For everyday people, 2023 does not look bright due to constant warnings from central banks around the world about inflation. This is prompting them to raise interest rates at faster rates than many would have ever anticipated not so long ago.

What Impact Will Interest Rates Have?

On the housing market, it will mean that homeowners on variable rates will see their mortgage repayments rise in line with core interest rates.

This could be a big problem for millions of people since wages haven’t risen much in the last decade while house prices have seen steady growth every year.

This is compounded by the cost of energy bills and food quickly rising in the last few months.

For businesses, it will mean fewer investments and less borrowing for projects and potential expansions. Many experts anticipate this will result in job losses or at least a lower demand in the job market.

This cycle will in turn likely impact the revenue of many businesses negatively and therefore only help business models that have little operational costs.

For the rest of the world, the picture is not too different than at home. The US is expecting higher interest rates and potentially higher inflation. The rest of Europe is also anticipating a similar outcome and many smaller economies are experiencing double-digit inflation and interest rates such as Turkey and Argentina.

Final Thoughts!

Changes in Business 2022

One thing that is almost certain at this stage, is that hopes of going back to normality are unlikely. The west is unlikely to trust Russia even after the Ukraine conflict comes to an end and so higher energy prices will be here to stay for some time yet.

This will, as a result, continue making inflation more difficult to tame for governments and central banks around the world.

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BPT Admin
BPT (BusinessProTech) provides articles on small business, digital marketing, technology, mobile phone, and their impact on everyday life, as well as interactions with other industries.

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