War in Ukraine delays industry recovery beyond 2023

EIU’s “Industry Outlook 2024” is a comprehensive report that offers growth forecasts and highlights key risks across seven business sectors for the year ahead, driven by the impact of the Ukraine war on commodity prices and the cost of living. The report underscores that the ongoing war has disrupted the post-COVID-19 pandemic recovery, elevating risks for businesses as economies decelerate or face the prospect of recession, with Europe being particularly affected.

“Russia’s invasion of Ukraine and the Western sanctions that followed have effectively halted the post-pandemic recovery. Elevated commodity prices, coupled with Europe’s energy crisis, have prompted many central banks to raise interest rates in the battle against inflation. The repercussions of these actions will reverberate through both consumer spending and corporate operations, resulting in dampened expenditures, profits, and investments. Nonetheless, amid these turbulent times, certain companies will find opportunities, especially those positioned to leverage high commodity prices or new investment prospects.”, said Ana Nicholls, Director of Industry Analysis EIU Additionally, EIU’s report delivered critical global forecasts for each of the following industries:

Weaker economic output and rising interest rates are expected to create more challenging conditions for banks, insurers, and fund managers. Fintech companies, which were once experiencing rapid growth, will feel the effects of the capital-market constraints.

In 2024, global energy consumption is projected to expand by 1.8%, primarily propelled by robust demand in Asia. Despite the persistence of elevated prices and unresolved supply chain disruptions, fossil fuel demand is expected to reach unprecedented levels. Meanwhile, there will be a substantial 11% increase in demand for renewable energy sources. The fate of almost every facet of the financial services sector in 2024 hinges on high-interest rates. While borrowers may feel the pinch, banks are poised to benefit from strong net interest margins in the coming year.