Marsh & McLennan Advantage Insights logo
Conversations and insights from the edge of global business
Menu Search

Quick Takes

Why Are Central Banks Creating Digital Currencies?

Source: Atlantic Council

Nineteen countries have started to test a central bank digital currency (CBDC) on a small-scale with a limited number of participants. The Atlantic Council defines CBDC as “the digital form of a country’s fiat currency that is also a claim on the central bank.”

As of today, the People’s Bank of China (PBOC) and the European Central Bank (ECB) are prominent players in the digital currency realm. The United States currently lags behind in the research phase, yet the Federal Reserve has expressed continued interest in the digital dollar.

As digital currencies expand globally, there are challenges ahead — the legal, political and regulatory properties of CBDCs remain unclear. But the IMF notes that there are also multiple benefits to having government involvement in digital currencies, including lower cash transfer costs, greater accessibility to banking services and easier implementation of monetary policies. 

85 Countries May Lack Vaccine Protection Through 2023

Source: Our World in Data

Note: COVID-19 doses administered by country income group

More than one billion COVID-19 vaccines have been administered worldwide, but only 0.31% have been administered in low-income countries. In comparison, high-income countries received more than 80% of administered vaccines to date, according to Our World in Data. On this trajectory, about 85 countries will not have vaccine coverage until 2023.

Africa has the slowest vaccination rate of all continents to date. The United Arab Emirates and Israel have administered the most vaccinations, followed by Bahrain and Mongolia. Low-income countries are relying on COVAX, an initiative that is facilitating equitable access to vaccines. 

The worldwide initiative pledged to make two billion vaccine doses available for delivery by the end of 2021. Over 90% of low-income countries asked COVAX for greater vaccination coverage to help protect against new variants. However, COVAX will need more investment and contributions from donor countries and the private sector to speed up vaccine distributions.

Global Food Prices Hit a 10-Year High

Source: Food and Agriculture Organization

Global food prices increased in May to 127.1 points indicating the biggest month-on-month gain in more than a decade. This is 5.8 points higher than in April and 36.1 points above prices recorded the same time last year, according to the FAO Food Price Index, a monthly tracker for changes in global food prices. 

In May, prices for oils, sugar and cereals surged — up 12.7 points, 6.8 points and 7.6 points from April, respectively. Cereal prices especially are on track to reach record highs — FAO is predicting an output of nearly 3 billion tons in 2021, a 1.9% increase from 2020. International maize prices rose the most by 8.8%, reaching 89.3% above their value last year; however, they fell toward the end of the month due to an improved production outlook in the U.S.

The pandemic caused major fluctuations in the food supply chain — from a shortage in workers to price increases in raw materials. As the world starts to reopen, demand from consumers is rebounding quicker than supply itself. As a result, in the past year, grocery bills in the U.S. rose by 7% to 10% compared to pre-COVID bills.

CEO Confidence at Highest Level Since 1976

Source: Conference Board

The level of CEO confidence rose to 82 points in Q2 of 2021 — a 9-point increase from Q1. This is the highest level recorded since 1976, when The Conference Board started measuring CEO confidence. 

In the second quarter, 88% of CEOs believed that economic conditions would improve over the next six months, while 94% of CEOs said that conditions are better compared to six months ago. CEOs are also more hopeful about the state of their own industries, with a 21% increase in optimism in Q2. Over half of CEOs expect to grow their workforce over the next year — up from 47% in Q1. 

The demand to hire has led to difficulty in finding qualified workers. “For CEOs, the challenge is no longer staying afloat, but keeping pace — in particular, with a likely resurgence of the labor shortages experienced before the pandemic,” said vice chairman Roger W. Ferguson, Jr. of The Conference Board. Vaccine distribution is pushing the U.S. economy to pre-pandemic levels, but for businesses to succeed, they will need to consider new workforce demands

COVID-19 Challenges Consumer Trust in the Financial Sector

Source: Morning Consult

The majority of U.S. adults surveyed are less likely to trust financial services companies now compared to a year ago, while 13% say they trust finance more. Finance ranked second among the industries for which consumers say trust is crucial, after health care companies, according to the Morning Consult. 

Within finance, investment and wealth management companies saw the largest decline, with a 7-point drop in net trust. In contrast, banks are trusted the most by consumers at 61%. Almost 90% of respondents say data privacy and security are tied to earning their trust, and 66% would stop using a bank if it experienced a data breach.

During the height of the COVID-19 pandemic, financial institutions provided protection and stability by “waiving account fees, refunding insurance premiums or investing in underserved communities.” However, as this industry focuses more on a digital-first approach, the Morning Consult states that trust will be determined predominantly through “data stewardship, security and reliability” as opposed to personal relationships. 

Get ahead in a rapidly changing world. Sign up for our daily newsletter. Subscribe