Slower and more ‘normal’ quarter-on-quarter rates of growth look likely over much of 2022. Omicron looks set to dent but not derail the recovery in early 2022.
Fiscal policy is less supportive, monetary policy is on a tightening path and households are seeing a hit to real wage growth given still high rates of inflation. Healthy aggregate household and company balance sheets will help though, and significant vaccination coverage in developed economies should keep economies on a smoother (and less inflationary) track as the year goes on. Inflation is expected to fall in 2022, but to higher lows than expected before.
The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.