A third of global businesses predict the current inflationary environment to continue for more than two years, according to new research.
Expectations were gloomiest in the UK, with 42 percent predicting high inflation would last more than two years, while 34 percent of businesses in Germany, and 29 percent in Singapore and 27 percent in the US said the same.
Half of businesses globally expect today’s inflationary environment to last between one to two years, and 37 percent of businesses believe inflation will get worse over the next year.
Just 15 percent of businesses globally predict the current inflationary pressures to last less than 12 months. US firms are most optimistic about this with 21 percent saying inflation will last less than 12 months, compared to 11 percent of UK businesses.
Tackling inflation is cited as the top challenge businesses expect to face over the next year. As a result, the findings reveal that businesses are increasing their budgets to prepare for economic uncertainty. Compared to 12 months ago, businesses, on average, have increased their budgets by 13 percent.
“Inflation is having a profound impact on businesses across the globe, causing supply chain disruption, rising costs, and higher borrowing costs,” said Cedric Bru, CEO of Taulia, which sponsored the research.
“As a result, businesses are having to increase their budgets to help navigate the storm and set themselves up for future survival and success.”
The survey was conducted by Opinium among 550 finance decision makers in the UK, USA, Germany, and Singapore, in businesses of US$750 million or more annual revenue. between 10-24 October 2022.
Taulia provides working capital management solutions, and is headquartered in San Francisco, California.