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The Normalization Mirage

It is easy to overly focus on a few, often anecdotal, variables to form a view on economic trends. To fight this attribute substitution bias and help provide a holistic perspective, a macroeconomic SWOT framework was introduced last year.


2022 was affected by the war in Ukraine and its unfavorable impact on energy prices, inflation, and interest rates. The level of pessimism was elevated. However, based on last November’s macro SWOT analysis, it was concluded that 2023 could bring positive surprises. And it did.


Moved by the seductive regression to the mean theory, many hope for a return to benign inflation levels and declining rates in 2024. Such progress would greatly contribute to restoring a sense of normalcy. But those expecting it to translate into higher economic growth and lower macroeconomic volatility will be disappointed, considering the many forces at play:


Given these circumstances, economic actors will have no other choice than to acclimate to macro volatility and proceed with strategic decisions, including corporate finance transactions.


As Bernard Tapie, the businessman who ironically conquered France under a socialist presidency (1981-1995) and is portrayed in Netflix’ Class Act (2023), once said: ‘If you swim fast against the current, you lose less ground than the others.’



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