Monday, December 6

Moody’s expects a stabilization of the global economy in 2022 and further growth in 2023


Headwinds caused by the coronavirus pandemic (COVID-19), the imbalances in the supply chain and the lack of labor will begin to dissipate next year 2022, which will allow the global economy to enter a stable growth stage by 2023, he said. Moody’s Investors Service (Moody’s) in a new report.

Given this reality, the risk rating agency points out that by the end of 2021 it expects a
5.8% global economic growth, by 2022 the growth would be 4.4% and by 2023 3.2%

Moody’s expects the G-20 economies to grow 4.4% collectively in 2022 and later 3.2% in 2023, driven by strong family spending, replenishment of
inventories and higher capital spending.

Meanwhile, what for emerging economies expectations for 2022 and 2023 would be
4.8% and 4.5%, respectively.

Regarding the main global economic engines, Moody’s singles out China as the
country with the highest economic growth in the next two years, 5.3% and 5.1%,
respectively, while The United States will grow, by 4.4% and 2.8% and Germany 4.5% and
1.8%, in the same periods.

For its part, the three largest Latin American economies Brazil, Mexico and
Argentina will grow 2.1%, 3.0% and 1.8% in 2022, respectively, and 2.5%, 1.9% and 2.0% in
2023, estimates Moody’s.

The credit rating agency expects that the current imbalance between supply and demand, So
as the persistent lack of labor in the market improves in the next
quarters and allow inflationary pressures on the supply side to moderate.

“Monetary and credit conditions will become more restrictive as banks Centrals seek to eliminate the liquidity of the pandemic era and interest rate support, on the way to adopting a neutral stance, ”said Madhavi Bokil, Vice President
Moody’s senior and author of the report. “If this adjustment is made gradually and duly communicated – thereby avoiding surprises in the financial market – we do not expect it to affect growth,” he added.

Other factors

Fiscal and monetary policies will tighten as growth stabilizesAs the economies recover, it will have less need for an accommodative policy.

Over the next two years, the approach to fiscal policy will shift from the objectives of
stabilization to strengthening long-term growth and the sustainability of
debt.

Monetary and financial conditions will tighten and banks are expected
take a neutral stance as they seek to eliminate the liquidity and interests of the era
pandemic.

“If the hardening is gradual and well communicated, avoiding market surprises: No
we hope they derail growth. “

Nevertheless, Moody’s warns that “widespread new outbreaks of COVID-19, continuing
bottlenecks in the supply chain and sustained and high inflation presents risks ” for economic recovery since “the pandemic continues to be a source of high
forecast uncertainty ”.

Another risk to the economic outlook is continued supply chain disruptions, persistent labor market shortages, and the resulting inflationary pressures this creates.

“High inflation also has the potential to erode household spending, due to the loss of purchasing power over time, if wage growth is not sustained. The threat of accelerating inflation could drive central banks to raise interest rates faster and earlier than expected, ”the report explains.

Moody’s concludes by noting that, how public and private entities adapt to higher levels of debt, Climate Change and risks to social cohesion will have micro and macroeconomic implications.

Finally adding that, Other factors that can reshape the economic environment include the effects of digitization on labor, product and financial markets, the rise of cyber crime technology and geopolitical realignment.

Hitler Cigarruista
[email protected], .pa
Financial capital



elcapitalfinanciero.com