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Global Economy| Outlook| December 2020

  1. • Paul Young CPA CGA • December 24, 2020 WHAT’S NEXT FOR THE WORLD ECONOMY
  2. Paul Young - Bio • CPA, CGA • Academia (PF1, FA4 and MS2) • SME – Risk Management • SME – Close, Consolidate and Reporting • SME – Public Policy • SME – Emerging Technology • SME – Financial Solutions • SME – Business Process Change • SME – Supply Chain Management Contact information:
  3. Agenda • GDP / Growth • Commodities • Stock Market – December 2020 vs December 2019 • Geopolitical Risks • Unemployment Rates • Growth Areas • COVID19/Deficit spending • Debt • Infrastructure • Green Economy • Job Quality Crisis • Trade and Protectionism • Audit Committee and Risk • eCommerce • Housing / Affordability • Throne Speech/Canada • 2020 USA Election • What’s next?
  4. GDP / Growth Source - or outlook-and-forecast-tables.scotiabank's-forecast-tables.2020.december-4--2020.html
  5. G7 and GDP Source – BNS and Moody's
  6. Commodities Source – BNS
  7. Stock Market - USA
  8. Geopolitical Risks • Geopolitical events are having bigger hit on both the private and public sector • Eco-Terrorism - • Risk Factors - development-risk-management-best-practices Source - business-in-2021
  9. Unemployment Rates Source - updated-9-december/
  10. Growth Areas Source - • More support for small businesses including startups - collapse-small-business • Technology sector - support-the-technological-sector • Automation - automation-238371946 • Vertical farming - canada-august-2020 • Fish and other farming techniques - fish-farming-and-harvesting-analysis • Technology and the Environment - change-what-can-be-done
  11. COVID19 / Deficit Spending Source - or • Countries need to start pulling back their deficit spending as part of the recovery • There should be focus on many areas like getting goods to market - best-to-get-goods-to-market and reforming of government - efficiency-and-effective-government-canada-and-the- world • Programs that supported income loss should be scale back as part of supporting re-entry back into workforce - owner-workers-cerb/ • More emphasis will be required on training and education - capital-management-skills-and-education • IMF - tells-g20-countries-to-keep-spending-on-covid-19-crisis- idUSKBN27I1X7
  12. Debt • Consumer, government and business debt levels could impact the recover due to cash flow issues. Blog: • In the past, there have been concerns about debt, especially if interest rates were to rise. Interest rates are still an issue. The bigger issue is cash flow with govt, business, and personal. Sales and wages could see significant shrinkage as part of the COVID19 recovery. • 2020/paulyoungcga/covid19-global-debt-crisis-july-2020
  13. Infrastructure • Countries around the world can help with the post recovery by investing in infrastructure Blog: • “Two critical elements in analyzing infrastructure projects are often overlooked: the true cost of capital and long-term maintenance expenses.” infrastructure-analysis-of-policy • Re-setting infrastructure spending - infrastructure/our-insights/resetting-capital-spending-in-the-wake-of- covid-19
  14. Throne Speech / Canada @JustinTrudeau your statements yesterday in the house on your throne speech were not back up with facts. The reality is your govt has failed to deliver on your key 2015 election platform as well as Liberals promised things since 1995.
  15. United States / Election 2020 United States has many issues facing their country - Income inequality - Job Quality - Tax fairness - Regional disparity - Economic growth - Broken legal system - Broken education and healthcare system - Efficient and Effective government - The international role of the United Stats - and or
  16. Green Economy Source - • Better balanced between the environment and the economy - global-emissions-and-climate-change • Cost of electricity is becoming a big issue for countries • rt-electricity-analysis-canada-and-the-world • Circular Economy – • Tougher environmental laws are required for waste management • how-to-best-support-a-circular-economy • Green Economy and Emissions • Many govts around the world are pushing the green economy as part of the post-covid19 recovery - reen-recovery or bal-emissions-and-climate-change-canada-and- the-world
  17. Job Crisis • Canada and Job Quality - employment-analysis-and-commentary or canada-october-2020 • USA and Job Quality - barkin/barkin-u-s-challenge-is-finding-jobs-for-last-5-displaced-by-crisis- bbg-idUSKBN26L2J0 • World Job Crisis - employment-crisis-deepening-equivalent-of-400-million-jobs-lost- un/76722399
  18. Trade and Protectionism u-s-goods-262170/ • “International arbitrators said Oct. 13 that the European Union can impose tariffs and other penalties on up to US$4 billion worth of U.S. goods and services over illegal American support for plane maker Boeing. The move further sours transatlantic ties at a time when the coronavirus has doused trade and savaged economies.” • More work needs to be done by all countries to fix trade related issues • Canada and Trade - • USA and Trade - trade-gap-united-states-was-43-cent-bigger • China and Trade - with-china-while-u-s-sits-it-out • Reforming the WTO - contest-for-the-next-director-general/ • Here is my work on WTO and Trade Policies - more-protectionism-november-2017
  19. Audit Committees and Risk Mitigation Audit committees will have fuller plates than usual in the coming year, according to Big Four firm KPMG, managing agendas packed with new risk management responsibilities amid the fallout from the coronavirus pandemic and other crises of 2020. In a recent report, KPMG’s Board Leadership center identified seven key issues that audit committees will be grappling with. To start, the report noted than more than 60 percent of audit committee members surveyed said that COVID-19 has prompted them to reassess the scope of their agenda and their risk management responsibilities. “Keeping the audit committee’s agenda focused will require vigilance,” the report noted. “Virtually all companies will continue to deal with significant disruption and uncertainty … . Does the audit committee have the time and expertise to oversee the major risks now on its plate?” Top 7 Risk Areas 1. Look at Audit Committee Agenda and workload 2. Monitor the financial reporting & disclosure impacts of COVID-19 on the company’s filings 3. Reinforce audit quality & understand the impact of COVID-19 on the external audit process 4. Work with management to reassess & and oversee the scope & quality of the company’s ESG/Sustainability reports & disclosures 5. Understand how technology is impacting the finance organization’s talent, efficiency, and value-add 6. Help ensure that internal audit remains focused on the critical risks including risks posed by COVOD19 and other geo-political events 7. Sharpen the focus on the company’s ethics, compliance, and whistle-blower programs, recognizing the increased pressure on employees Here is my blog on how to streamline reporting including mitigation of risk - other-geo-political-disclosures-extra-risks-top-paul-young/?published=t
  20. eCommerce 1. Delivery becomes the new normal - Delivery services have become all the rage. The likes of Uber Eats, GrubHub and Instacart have fundamentally changed the way people get restaurant food or receive grocery store deliveries 2. Alternative business models ring up gains - Once upon a time, retailers sold products to customers. But digital technology is driving fundamental changes to the old-fashioned transactional model and making consumers more comfortable with paying for value over time. A growing array of brands are making products available on a subscription basis. Some retailers are exploring ways to use things like smart speakers and IoT to replenish items automatically. 3. Fulfillment hubs eclipse storefronts - Shifts in consumer behavior will have repercussions in 2021. As leased storefronts in malls underperform due to a lack of foot traffic, retailers are looking to convert them into fulfillment hubs. There’s remarkable synergy in using these spaces for ecommerce—in some cases, transforming them into mini-distribution centers—particularly when paired with last-mile delivery services. Amazon has already begun to eye this model to expand its footprint and same-day delivery network further. It has reportedly engaged in talks with mall operators to take over empty space as retailers like Sears and J.C. Penney vacate 4. New store designs appear - Despite a massive shift to ecommerce, physical stores are not going away anytime soon. They are just going through a corresponding transformation. Several prominent retailers focus on blending online and in-store shopping, emphasizing creating a more engaging and socially distanced shopping experience. For instance, Walmart recently grabbed headlines when it announced that it would overhaul 200 of its supercenters into airport-inspired stores, complete with more prominent signage, contactless checkout, and other innovations. 5. Online gets personal - Video calls have already gone mainstream in the business world. People see each other, share screens and exchange information. Retailers are also beginning to recognize the value of video chat as a consultation and sales tool. Whether a consumer is buying a car, furniture, or upscale clothing, why not offer an option of connecting to a sales associate or product expert whenever it is convenient? This can be after work, on the weekend, even late at night. 1. Source - Areas of focus Omni Channels - Sales Tax / eCommerce sellers.html Here is my work on eCommerce -
  21. Blog – Housing Affordability • Housing costs continue to hit household budgets - • More innovation is required to help fix systemic issues facing housing - market-canada-and-the-united-states-november-2020 • Household affordability – Global Ranking - market-sa-ranks-as-one-of-the-most-affordable/30044
  22. What’s next • The world has shown there were issues with their various responses to pandemic. All levels of government should have audited crisis and risk management reports - • More balance between the economy and GDP - • More emphasis on supply chain including local solutions - • Reforming taxation as part of overall tax fairness - • Reforming the size of government – • Stop pushing guarantee income and start working on policies that will support better jobs - analysis-guarantee-income • Innovative solutions when it comes to upgrading and/or building new infrastructure - infrastructure-analysis-of-policy • Fixing the systemic issues with housing - september-2019 • Reforming global organizations like WHO and WTO - or • Better urban planning decisions including rural and urban strategies - whats-next-236315321 • Working together to reduce geo-political issues - • Reforming accounting and audit as way to provide more oversight into financial performance of businesses and the government - • Vaccines production and distribution -
  23. Other Sources • If you like to learn more about trade and/or other subjects as part of your professional learning and development then feel free to review my material on https://www.udem (search Paul Young CPA CGA