With over 3,000 participants gathering in the snow covered Swiss mountain retreat of Davos to attend the World Economic Forum (WEF) it is to be hoped that viable solutions to the forthcoming challenges can be thrashed out between the global leaders. In a recent survey conducted by The Conference Board new survey apparently over 800 international CEOs flagged up the risk of recession as their main external worry with worldwide political instability as their second most important concern.

Unsurprisingly the global growth rate is one of the major issues under the spotlight at the WEF and one of the first commentators, Christine Legarde, the head of the International Monetary Fund (IMF), held a press conference https://www.imf.org/en/News/Articles/2019/01/21/sp012119-md-opening-remarks-for-weo-press-conference-davos where she introduced the IMF's new chief economist Gita Gopinath who was about to deliver the World Economic Outlook (WEO) report

Ms. Legarde gave a brief outline of the WEO stating that the global growth forecast had down-graded the outlook from the previous growth forecast of 3.7 per cent to 3.5 per cent. She further commented that the previous two years of strong expansion were effectively de-railed by trade tensions and escalating risks to global growth. Ms. Lagarde sought to paint a picture of the WEO using the analogy of a cross-country skier moving at a good speed last year but now the slope has changed and now points up-hill. She pointed out that the higher tariffs, rising uncertainly over future trade policy and higher market volatility all contributed to the challenging financial conditions which present a major risk of high debt burdens to economies across the globe.

These concerns were reiterated by the United Nations (UN) https://www.un.org/development/desa/dpad/ in its World Economic Situation and Prospects study which indicated that global growth had peaked citing the spiral of additional tariffs and the standoff "provoked by the protectionist policies of the US President, Donald Trump" which will no doubt lead to a slow-down in investment and a decline in business confidence, creating the strong likelihood of higher consumer prices.

The IMF does have suggestions as to how to attempt to mitigate the slowdown, and proposes actions that can be taken to strengthen international economies by developing resilience to downturns. One way suggested was for governments to reduce their debt which would make way for the provision of a financial buffer against future downturns. The IMF also suggested that the promised digital revolution could be an aid to greater efficiency provided that the individuals displaced by machines were not discarded but helped into better opportunities where they could continue to contribute. However, the most important possibility is that there should be global collaboration aimed at commitment to the common good and working towards international cooperation to resolve shared problems.

All countries working together for the common good and judiciously reducing their debt whilst re-jigging their digital programme are all admirable things to aim for; however, even the largest of commercial organisations has limited ability to control the actions of governments and one thing is certain that whatever happens at a global level will have a knock-on effect down the chain. Businesses at all levels may be forced to consider strategies to ensure survival and profitability. This may be the right time to consider increasing the strength of your business against the threats to commercial stability that are being discussed. Increasingly merging with an overseas firm (or firms) to increase the global footprint or acquiring another division which brings additional services or products to your existing and future clients may be a viable way of withstanding the volatile future predicted. Well managed strategic expansion will only be a benefit to both the business and its customers, as well as providing long term security. Such a step must be taken only after extensive consideration and research into the potential impact. Then and only then can the search for the appropriate business partner begin.

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