Omicron, geopolitical tensions, new euro crisis and rising food prices: Bloomberg lists economic risks for 2022

Most analysts expect a sustained recovery in the global economy in 2022, but, according to Bloomberg, there are a number of factors that could hamper this expectation. According to its experts, and despite optimistic forecasts, the world could be surprised again, since “the years of covid-19 are full of predictions that have not come true.”

Yes the omicron variant more contagious and deadly than the previous ones, the world economy would stumble on the road to recovery. A possible return to severe shutdowns could cause economic growth to slow down in 2022, from the baseline forecast of 4.7% to 4.2%. In this scenario, demand would be lower and supply and logistics issues would persist.

Bloomberg insists that the threat of a brutal inflation, which could be stimulated by a rapid rise in wages in the United States The emergence of new waves of coronavirus and the exacerbation of geopolitical tensions could push up the prices of oil and gas, which, in turn, would trigger the price growth for most goods. What if the US Federal Reserve took the decision to increase interest rates, developing country markets could face additional economic challenges from capital withdrawals.

In addition, the journal’s experts noted that a combination of the effects of the coronavirus and adverse weather conditions increased the world food prices at record levels, a trend that would continue to persist in 2022. Hunger is a historic engine of social unrest, Bloomberg recalls. The last food price crisis in 2011 sparked popular protests in the Middle East. Many countries in the region continue to face the problem of food shortages.

In 2020 and 2021, governments spent significant sums to support citizens and sectors of the economy affected by the coronavirus pandemic. Many countries plan to “tighten their belts” next year. The decline in public spending By 2022, it will reach 2.5% of global GDP, about five times more than the austerity measures put in place after the 2008 financial crisis, which subsequently slowed the growth of the global economy.

In Bloomberg’s view, everything escalation between China and Taiwan In 2022, from blockade to direct invasion, it could spill over into other world powers, primarily the United States. In this case, economic sanctions would be imposed that would freeze ties between the world’s two largest economies, in addition to rushing, among others. , a collapse of semiconductor production in Taiwan.

Bloomberg pointed out that the solidarity between leaders supporting the European project has helped the EU survive the COVID-19 crisis. However, if Eurosceptics come to power in France and Italy in 2022, the bloc could face a new crisis in the euro zone.

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