Economic circles are currently focusing on the likelihood that 2024 will unfold as a year marked by the global economy’s intertwining cost and demand inflation dynamics.

The issue of energy supply security, particularly in its geopolitical context, remains a significant source of tension, ensuring sustained upward pressure on global energy prices. Consequently, the year ahead is anticipated to prioritize the management of electricity and natural gas costs for both SMEs and companies on one hand and households on the other. As a result, individual and corporate measures aimed at enhancing energy efficiency will become more prominent than ever.

Global challenges

A troubling cycle is anticipated, where global and regional geopolitical tensions and uncertainties are poised to undermine the performance of the world economy, leading to an expected decrease in energy demand. In response, countries that produce and export energy are determined to enforce a quantity restriction in 2024 to prevent a decline in energy derivative prices. Compounding the challenge is the EU's call for a synchronized reduction in energy bill support across all member states, despite the strain this would impose on SMEs and households. This call contradicts the core principle of "social statism," which is a primary focus for EU member countries.

Nevertheless, particularly on the EU front, the shock and paralysis syndrome stemming from geopolitical and geoeconomic developments, which have a detrimental impact on growth, paradoxically necessitates stronger public support to maintain social peace and sustain SMEs. Consequently, the mounting pressure to curtail public support in the name of fiscal discipline may influence political dynamics in Europe, especially considering the global election year dynamics expected in 2024.

In fact, discussions about the current socioeconomic unrest and its potential impact on electoral outcomes have already commenced. Disturbingly, half of the companies in Europe express intentions to preserve their workforce next year, while regrettably, 40% contemplate employment reductions for cost management.

This overall scenario leads to the following conclusion: 2024 will require nations and businesses to prioritize efficiency, productivity and crucial measures for cost management.

Despite financial challenges, companies will persist in investing in enhancing production processes, aiming to boost efficiency and productivity, as they continue the pursuit of sustainable exports in the global competitive landscape.