We are optimistic about economic growth in 2022. We expect strong growth in the US, the eurozone and Japan, but China will lag. Many countries have not yet recovered from the coronavirus pandemic. Yet corona continues to play a significant role.
Macro Outlook in a nutshell:
- Strong growth in the US, eurozone and Japan; China to lag behind slightly.
- Economic reopening will trigger higher growth.
- Higher inflation is persisting for longer than expected, but it should still be temporary.
- Interest rates will climb gradually in 2022.
- Equities remain attractive, gold is preferable to bonds, while infrastructure and land provide protection against inflation.
Making predictions was a fruitless task in 2020 and 2021 as forecasts underwent frequent adjustments. At the start of 2020, for instance, economists were predicting global growth of over 3% for the year, but the Bloomberg consensus ended up at -4 %. Meanwhile, economists began 2021 forecasting 4% growth for the US economy, while the consensus estimate peaked at 6.5% in the summer, only to drop back towards 5.5% later in the year . This is of course all part and parcel of the unpredictable nature of a global pandemic and its impact on economies, inflation and financial markets. But now that many countries have succeeded in vaccinating significant proportions of their populations, coronavirus should have less of an impact on economic growth. Yet the contagious Delta variant and the risk of new variants arising mean that coronavirus remains a significant risk factor for economic growth that should not be underestimated.
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