This week, the U.S. GDP report stated that the U.S economy shrank by 0.9 percent, the second consecutive quarter where the economy has contracted. Additionally, The Federal Reserve hiked interest rates by 75 basis points. These reports are a reminder that the United States and other parts of the world are experiencing record levels of inflation and an unprecedented pace of monetary tightening. Inflation is top of mind for economists, governments, business leaders and consumers as well as risk managers who are navigating new forms of volatility on behalf of their organizations.
The current level of global inflationary pressures has not been seen in generations, due in large part to the effects of the COVID-19 pandemic, which has created myriad interconnecting issues resulting in demand of goods and services outstripping supply. Aon notes food, agribusiness and beverage, natural resources, and transportation and logistics as three sectors highly impacted by inflation. Read more about Aon’s insights on mitigating the impact of inflation and sign up to receive alerts here.
Jas Thandi, partner of portfolio strategy at Aon, recently discussed the economy and how organizations can make better decisions for growth with Yahoo! Finance Live, where he noted, “The path of inflation is much more uncertain. So, for our clients, it’s about moving into markets where you are insulated from that and can benefit. Asset classes like infrastructure and private credit for institutional investors.” Watch the full interview here.
Experts at Aon have also commented on the impact of inflation on other areas, including losses from natural catastrophes globally and property costs for insurers in Canada. Franco Di Lucca, head of Aon’s South Cone – including Chile, Argentina, Uruguay, Paraguay and Bolivia – recently spoke to James Platt, chief operating officer of Aon, about managing a business through an inflationary environment. “We need to be proactive when it comes to inflation – to get ahead of it. It’s difficult because of the ‘speed of money’ – how quickly it changes value – and the velocity of the circulation of money. So we need to be faster than inflation. In my view, we de-risk our company and the country together,” said Di Lucca. View an edited version of their conversation or listen to the full episode of the On Aon Podcast.