The risks that will weigh on global growth in 2022

After an exceptional rebound in the global economy in 2021, which reached 5.9% growth, the recovery path is expected to weaken this year. The International Monetary Fund (IMF) warned in December 2021 that it would lower its forecast – initially set at 4.9% for 2022 – due to the appearance of the Omicron variant, and the European Central Bank (ECB) is now counting on weaker than expected activity in the euro zone, at least at the start of the year. In addition to the epidemic risk, there is rising inflation, rising geopolitical tensions and supply difficulties.

  • A global economy still under the threat of Covid-19

Growth will be largely determined by the course of the pandemic. Proof if need be, when the discovery of the Omicron variant was announced on November 24, new restrictions were imposed, the price of a barrel of oil fell $ 10, and airline stock prices fell. If, ultimately, this variant should have a limited economic impact in the United States and Europe thanks to relaxed restrictive measures, it will slow down activity in China, which pursues a zero Covid strategy and continues to impose strict confinements. .

In a note published on January 4, analysts at Oxford Economics found that in Asia, “ confidence has taken a hit as Omicron increases the risk of demand moderation and supply chain disruptions ”. Economies around the world, however, are more resilient than at the start of the pandemic. “The severity of the restrictions imposed to contain an epidemic shock has diminished”, notes S&P Global Ratings, which adds that “The economic costs caused by the restrictions have eased, as businesses and households have adapted”.

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  • The danger of an inflationary spiral

At the start of the pandemic in 2020, economists feared serial bankruptcies and mass unemployment. It is ultimately inflation, fueled by rising energy prices and supply chain disruptions, that is the main threat at the start of the year. In 2021, at the end of the year, it reached 6.8% across the Atlantic, a record for nearly forty years, and nearly 5% in the euro zone. Central banks will have to choose between reducing their support for the economy to curb price increases or, on the contrary, maintain an accommodative monetary policy in order to support the fragile recovery.

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