Asset Management One reviews the Global market in 2021 and looks ahead to see what is in-store for 2022 and beyond.
Economic Outlook for 2022
In the process of normalisation from the COVID-19 pandemic, the US economy will enjoy high growth until the end of 2021. Following a pause in the normalisation of the services sector (chart on the right), economic growth is expected to slow to around 2-3% per annum in 2022, centering on consumer spending. The pace of the labour market recovery will also slow as the industry structure continues to transform, with the unemployment rate bottoming out at around the low 4% range. The diminishing of the boosting effect of fiscal policy, which has significantly boosted growth in 2021 (chart below), will also lead to a slowdown in economic growth in 2022. Inflation, which swung sharply higher in 2021, is expected to subside to the 2% level in the second half of 2022 as economic growth slows and global supply chain pressures begin to normalise.
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