Joao Vale e Azevedo: Gap between Demand and Distribution of Goods Pose a Risk

The inflation is no surprise for Joao Vale e Azevedo, chairman of KUNST Global

According to the International Monetary Fund (IMF), the United Kingdom will experience a slower growth in their economy in 2022. While the reason behind that is the Covid-19 variant Omicron, the organisation still claims that the British economy will be the fastest in its recovery compared to the other fellow countries of G7. In spite of the good news though, IMF also warned that Britain will face several hardships in months to come.

This is no surprise for Joao Vale e Azevedo, chairman of KUNST Global – an equity firm based in London, Geneva, Zurich and Luxembourg. As an influential voice in international finance, Azevedo has been observing that these hardships are indeed going to last a little longer, especially when it comes to the case of inflation and the increased demand for consumer goods.

While it was expected that e-commerce would intensify during the pandemic, this was something already foreseen by the industry even in the absence of the sanitary crisis. The problem, however, lies in the supply chain industry, which is not being able to deliver the demands and also paying high prices for their energy consumption. “The offer is no longer able to meet the market demands and this is not a contingency, it is a physiological fact,” says Azevedo.

With the dramatic increase in the price of energy, not only companies are suffering the backlash, but families too. “European governments promise immediate solutions, but these are just band-aids with which they hope to heal a much deeper wound,” explains Azevedo. For him, the fact that politicians often concentrate only on the short-term perspective is also mining the ways out of the crisis.

Now, when it comes to electrification, although the method is good for the environment and possibly a sustainable and efficient approach to the energy crisis, the chairman of KUST Global stresses that Western economies still rely a lot on the car and gasoline industries. Moreover, the proposition of electrification often ignores the consequences in the bigger picture, such as the fact that Western economies still heavily rely on fossil fuels and there is no proper infrastructure for this migration as of yet.

What is more, Azevedo stresses the negative impacts that electrification could provoke on employment rates: “We can give all the incentives in the world for the purchase of electric cars and ban petrol and diesel cars, but we must understand how to manage the millions of unemployed that will grow around the world when traditional car factories or oil refineries close.”

Unfortunately, the war in Ukraine also poses the risk of intensifying this scenario described by Azevedo. For him, if Russia persists on the war, not only this country could face bankruptcy, but actually prompt a domino effect in the whole West. “Regardless of this, the war in Ukraine means greater market instability, rising energy prices that are already out of control, and a further increase in inflation, which could reach double the current levels,” he adds.

But in spite of the worrisome perspectives, Joao Vale e Azevedo believes that there is still hope when considering the power of collectivity. According to the chairman of KUNST Global, the past two years of pandemic have taught people heavy lessons about the role they play in the global community. The war in Ukraine, as worrisome as it is, has been proving the same: a new sense of collective consciousness could be strategic in the current scenario.

“The fact that we have had fewer opportunities for interaction has meant that we are now more aware of the value of those interactions, and probably also of human life. We are a stronger community. The challenges that await us are very difficult, but together we are much better prepared to face them,” he concludes.

The post Joao Vale e Azevedo: Gap between Demand and Distribution of Goods Pose a Risk appeared first on .

The inflation is no surprise for Joao Vale e Azevedo, chairman of KUNST Global

According to the International Monetary Fund (IMF), the United Kingdom will experience a slower growth in their economy in 2022. While the reason behind that is the Covid-19 variant Omicron, the organisation still claims that the British economy will be the fastest in its recovery compared to the other fellow countries of G7. In spite of the good news though, IMF also warned that Britain will face several hardships in months to come.

This is no surprise for Joao Vale e Azevedo, chairman of KUNST Global – an equity firm based in London, Geneva, Zurich and Luxembourg. As an influential voice in international finance, Azevedo has been observing that these hardships are indeed going to last a little longer, especially when it comes to the case of inflation and the increased demand for consumer goods.

While it was expected that e-commerce would intensify during the pandemic, this was something already foreseen by the industry even in the absence of the sanitary crisis. The problem, however, lies in the supply chain industry, which is not being able to deliver the demands and also paying high prices for their energy consumption. “The offer is no longer able to meet the market demands and this is not a contingency, it is a physiological fact,” says Azevedo.

With the dramatic increase in the price of energy, not only companies are suffering the backlash, but families too. “European governments promise immediate solutions, but these are just band-aids with which they hope to heal a much deeper wound,” explains Azevedo. For him, the fact that politicians often concentrate only on the short-term perspective is also mining the ways out of the crisis.

Now, when it comes to electrification, although the method is good for the environment and possibly a sustainable and efficient approach to the energy crisis, the chairman of KUST Global stresses that Western economies still rely a lot on the car and gasoline industries. Moreover, the proposition of electrification often ignores the consequences in the bigger picture, such as the fact that Western economies still heavily rely on fossil fuels and there is no proper infrastructure for this migration as of yet.

What is more, Azevedo stresses the negative impacts that electrification could provoke on employment rates: “We can give all the incentives in the world for the purchase of electric cars and ban petrol and diesel cars, but we must understand how to manage the millions of unemployed that will grow around the world when traditional car factories or oil refineries close.”

Unfortunately, the war in Ukraine also poses the risk of intensifying this scenario described by Azevedo. For him, if Russia persists on the war, not only this country could face bankruptcy, but actually prompt a domino effect in the whole West. “Regardless of this, the war in Ukraine means greater market instability, rising energy prices that are already out of control, and a further increase in inflation, which could reach double the current levels,” he adds.

But in spite of the worrisome perspectives, Joao Vale e Azevedo believes that there is still hope when considering the power of collectivity. According to the chairman of KUNST Global, the past two years of pandemic have taught people heavy lessons about the role they play in the global community. The war in Ukraine, as worrisome as it is, has been proving the same: a new sense of collective consciousness could be strategic in the current scenario.

“The fact that we have had fewer opportunities for interaction has meant that we are now more aware of the value of those interactions, and probably also of human life. We are a stronger community. The challenges that await us are very difficult, but together we are much better prepared to face them,” he concludes.

The post Joao Vale e Azevedo: Gap between Demand and Distribution of Goods Pose a Risk appeared first on .

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