Inflation is falling faster than expected globally, from 6.8% to 5.8% in 2024, according to the International Monetary Fund.

Labor market changes and supply chain shocks can lead to a slower decline in addition to the lag effect in the economy. For example, labor market and supply chain shortages can cause an increase in wages and production costs, resulting in central banks increasing interest rates to bring down inflation and therefore prices.

Although this mechanism may take a while to yield an effect, the shift affects small and medium-sized businesses (SMBs). As interest rates increase, it can become challenging to borrow cash and adapt to rising prices. By adopting smart business buying practices, SMBs can strategically manage their budgets and reduce costs while keeping their customers satisfied.