A pandemic, tensions in relations between Russia and Ukraine, as well as natural disasters caused by climate change can negatively affect economic growth.
Most economists expect global economic growth in 2022, but their forecasts may be wrong. This is stated in a Bloomberg article distributed on Monday.
“Most forecasters expect a confident economic recovery, lower prices, and a departure of governments from emergency monetary policy,” the agency writes.- What can go wrong? A lot.” The authors of the publication pay special attention to the coronavirus pandemic and the spread of the omicron strain. “Probably more contagious than its predecessors, it may turn out to be less dangerous,” they note. “This will help the world to return to something resembling the normal situation before the outbreak of the pandemic, that is, an increase in spending on services.” Economic growth may reach 5.1%. If the new strain turns out to be more contagious and dangerous, then the growth of the global economy will slow down to 4.2%.
“Tensions in relations between Russia and Ukraine may lead to an increase in gas prices,” the agency continues. “And natural disasters caused by climate change can lead to a further increase in food prices.”
An increase in the base interest rate by the U.S. Federal Reserve may mean trouble for emerging markets, the article says. Usually, such an increase strengthens the dollar and causes capital flight from these markets. In China, the problems with the shortage of energy resources should become less acute next year. But other problems will remain. Nevertheless, experts predict that China’s economy will grow by 5.7% in 2022. The solidarity of European leaders and the policy of the European Central Bank helped Europe cope with the consequences of the COVID-19 pandemic, but next year the importance of these factors may decrease.
Geopolitics will also have an impact on the global economy, the authors point out. Any escalation around Taiwan could trigger a reaction from other world powers, including the United States, they write. “A war between superpowers is the worst option. But other scenarios include the imposition of sanctions that will freeze relations between the world’s two largest economies, and the collapse of semiconductor manufacturing in Taiwan, which is crucial for global production – from smartphones to cars,” the agency notes.
“In 2020, the situation in the economies affected by the pandemic turned out to be worse than any economist predicted,” the article says. – In 2021 it was different. In many countries, the economic recovery has been surprisingly rapid. It serves as a useful reminder that something can go right next year.”