Critical Effects of Economic Instability on Businesses

[Jasz]

Economic instability is a major problem for businesses. The most critical effects of economic instability on businesses are it reduces internal capabilities, increases competition and slows down growth.

Economic instability can lead to economic recession reducing the amount of money you can get from a business. Economic instability can also lead to shrinking profits and increased spending on your part.

Thorough investigation was made on critical effects of economic instability on businesses. Both primary and secondary data were utilized for the research from different sources and thorough analysis was done on collected data. The main aim of the research was to investigate all the possible ways by which business can be affected by economic instability.

More than 500 UK businesses were asked their views on the effects of economic instability and the impact it has on business. The results showed that three-quarters of businesses (79%) still see economic instability as a major or significant concern when compared to last year’s survey result of 90%. 60% are concerned about how rising inflation will affect the cost of running their business, up from a third in 2017. 50% believe that changes to immigration laws will make it harder for them to hire skilled workers from abroad, up from 39% in 2017.

 

[PICKFORD]

Economic instability in a particular area has great effect on both it people, productivity, and cost of living, as well as standard of living of the people. Businesses are not left out, economic stability affect a business , enterprises , financial organisations , and also various companies. One of the effect economic instability have on a business is that it result to lack of capital thereby hindering or obstructing new or young entrepreneurs to establish or implement their business ideas.

This is so true especially in areas like Africa to be precise Nigeria, a lot of people have good business ideas but due to the luck of human resources like capital such business ideas just remain ideas without being implemented, another effect of economic instability towards businesses and commerce organisations is the lack of social amenities to facilitate and encourage commercial activities, because the economy is low it therefore hinders the establishment of various social amenities like good roads , railway lines , maintain an up-to-date seaports, maintain an up-to-date airport etc. All this social amenities listed above facilitate economic and commercial activities and because the economy is low or is in stable things like this are not in large quantity or established at all thereby affecting business.

 

[Alexandoy]

Sometime before the new millennium when our economy was unstable due to the political turmoil, a friend who started a business with the importation of imported car parts had felt the impact. The dollar was too high in the exchange market that importers could not import their products. I remember an uncle who said that even the wine cellar had no more (imported) wine and whiskey to sell because they could not buy without the dollar. Would you believe that the apple which is an imported fruit became rare with an exorbitant selling price? That was the effect of the bad economy on the business.

 

[Good-Guy]

I have been residing in a country for a few years that is totally unstable,. The economy of my country is so poor due to the fact that the government of the country always borrows loans from The International Monetary Fund and they often have a poor management of those funds. They are simply not able to utilize the natural commodities found in the country and they do nothing to work in order to improve the economy of the country. Due to such kind of carelessness by the government, the public of the country suffers.

This has also been the case with many other countries where the politicians are corrupt. Secondly, I must say that the economy has also suffered due to the pandemic crisis. The global economy has been in a really bad conditions since the year 2020 and many people became unemployed due to this reason. However, even in such kind of hard situations, many Tier 1 countries managed to survive and now they are gradually recovering from the pandemic. This is why I believe that a country must never depend on loans and have enough cash reserves to deal with global economic crisis during the time of pandemic or World wide market crash.

 

[Chibson]

Many businesses does not survive in an unstable economy. One of the main reasons you see a lot of billion dollar business in United States of America and the other tier 1 countries is because the economy is stable and there is a conducive environment for such businesses to thrive and make a whole lot of profit. The reverse is definitely the case in a country where by the economy is unstable.
Economic is very important for businesses to thrive in a particular country. There are several effects of economic instability on businesses and such is usually seen in tier 3 countries.

In a country where there is economic instability, it will be very hard for new businesses to grow and be prosperous on the long run because of so many factors and reasons. Firstly, so many businesses may lack the financial capability because of how expensive it will be to set up a very good business. It will also be very hard for businesses to pay their workers especially the new businesses and they cannot hire professionals to run their business effectively. the purchasing power of citizens of that country will also be very low and this is a very big disadvantage in running a business in a particular country.

 

[Kingsley]

Living in a country where there is economic instability will not only pose a serious threat to business owners but to all those living in the country. From the skilled to the unskilled will all feel the burn. But the professionals and academia will feel the stings of the harsh economy. Businesses both foreign and local industries will just be struggling in such economy. Anyway my country is also a very example of such a country suffering economic instability as a result of poor leadership and poor management strategies from the selfish government and insensitive leaders that we have. All they are concerned about is how to cling to power and they don't really care about the well being of their followers.

As soon as they get into office they will start making policies that is not consistent with what they promised to do in their manifesto. Just like the current administration who promised a lot of goodies for the people but eventually as soon as they got into office they have suddenly become stiff neck in doing anything good. They bring up things that will make them to loot the available cash in the economy. They have never done anything good.