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‘The easy phase is over’: uncertainty is about to return to Covid worldwide

The global economy has risen as a result of the recession caused by the Covid-19 crisis than most economists expect in 2021 but face challenges in the coming year, forecasters have warned.

Progress will be based on the risk of the epidemic, the slowdown in inflation and the spread of economic collapse in countries and industries, he said, warning of serious financial and economic risks as governments and central banks seek a response.

“The simple stage of global economic change is coming to an end,” said Daan Struyven, a global economist at Goldman Sachs.

Janet Henry, an HSBC economist, said the results could not be “Goldilocks” – not too hot and not too cold.

Many economists agree that in many countries strong recovery combined with rising inflation makes it difficult to balance management and demand.

Simon MacAdam, a global economist at Capital Economics, said that although inflation was low, there would be a sharp rise in prices due to financial markets, particularly in the US, and “inflation and inflation.” many.

Economists in Nomura are confident that financial officials will start to improve, but it will come at a price. “By the end of 2022 we are seeing a very different change, which is at greater risk than instability,” he warned.

The OECD expects global growth from 5.6 percent in 2021 to 4.5 percent this year, with inflation rising from 3.5 percent to 4.2 percent, although interest rates will come in the first months of the year.

Economists agree that the major uncertainties that will occur in the coming year are based on what has happened in the last 12 months. The return is better than expected along with the shift in spending from commodity to higher prices and to show that consumer interest in consumer spending exceeded the company’s ability to deliver.

The Coronavirus vaccine has allowed the fast-moving and effective ban on consumer spending, which puts the country at the end of the year “in a better place than we expected last year,” Henry said.

What will happen in 2022 will take three connected forces.

The virus

The outbreak also affects the desire of individuals and companies to use and ban government travel, which is also growing in Europe.

“The global economy continues to suffer from the ups and downs of the epidemic,” said Jay H Bryson, an economist at Wells Fargo. Although families, companies and countries have been making great strides in adapting to the waves of coronavirus, the latest version of Omicron shows that it still has the potential to undermine consumer confidence and business and economic performance.

Tamara Basic Vasiljev, an economist at Oxford Economics, also said that Omicron had shaken the minds of consumers around the world over the past few weeks. But with the ideas still very high and strong household income, they do not expect the economic crisis to be global.

“The global economy will thrive on the complex waters provided by the Omicron brand,” he said. The biggest doubt is whether there will be more waves coming.

Rising prices

The second major uncertainty stems from the imbalance between global availability and demand, which led to a rise in prices in 2021.

Economists expect the headline to fall – in part because of last year’s inflation rate, and because oil and energy prices should not go up.

The question is whether inflation pressure will be sufficient for central banks to avoid taking action to reduce inflation, which could jeopardize recovery.

“As the year progresses, [supply] The deficit should be reduced and inflation should be reduced, albeit slower, “MacAdam told Capital Economics.

“We suspect that the Fed’s tightening curfew has proven to be sufficient to lower inflation by 2 percent,” he added.

Immediate damage

The third major global economic crisis in 2022 stems from the gap between countries and industries in their ability to address the crisis.

Spain, Thailand and Indonesia have fallen significantly behind their expected economic growth, with Turkey, Taiwan and China leading the way, according to a Goldman Sachs study.

Outflows in Spain, Thailand, Indonesia and the UK remain weak Real GDP (Q3 2021, forecasts) Percentage change compared to Q4 2019 with Percentage change based on current growth averages 2017-19 G2071_21X

Much of this, Struyven said, was due to the way countries were exposed to groups that were affected by a change in interests or interests; for example, manufacturing has become increasingly important as tourism and tourism facilities have been severely damaged.

“Jobs that remain financially stressful in many states are often associated with high risk of viruses, such as spectator and outdoor activities, or linked to office activities, such as hiking or cleaning,” Struyven said.

For countries with these services, the benefits may depend on “significant medical changes” to deal with the epidemic.

Because of this great uncertainty, the monetary and economic policy can lead to an increase in inflation if more pressure is given, or into a standstill if recovery does not receive adequate support.

According to Henry at HSBC, “things are still very far from normal”.

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