A mix of temporary and policy-driven crunches, the biggest being real estate, has sparked a sudden slowdown in China, which we expect to continue through Q4 2021 and the beginning of next year. As a result, we cut our GDP growth forecasts to +7.9% in 2021 and +5.2% in 2022.
Pent-up demand, tight supply, green policy and bad timing are the recipe for skyrocketing energy prices, which could take three to six months to cool down. Europe is particularly at risk due to low stocks and its high dependence on natural gas.
Oct 07, 2021
Global,Financial Assets,Wealth Distribution,Wealth
2020 was the year of extreme contrasts. Covid-19 destroyed millions of lives and livelihoods and the world economy plunged into its deepest recession since World War II. At the same time, monetary and fiscal policy mobilized unimagined sums to support the economy, markets and people.
The withdrawal of support measures for companies sets the stage for a gradual normalization of business insolvencies. Our Global Insolvency Index is likely to post a +15% y/y rebound in 2022, after two consecutive years of decline (-6% forecast in 2021 and -12% in 2020). However, even in 2022, business insolvencies would remain below pre-Covid-19 levels in most countries (by -4% on average).
The discussion about excess saving could (and should) better distinguish the two components of what it is usually called saving, namely saving proper – money that is spent, but not on consumption -, and hoarding - money that is not spent at all.
When the world’s top central bankers virtually convene at this year’s ECB Annual Forum, the scale and duration of the current surge of inflation will invariably be high on the agenda. But we continue to believe that the current cyclical price pressures are unlikely to morph into a long-lasting trend.