economic prospects

What does 2022 bring? Uncertainty

Vie, 01/28/2022 - 18:18 -- bacosta


After a 2021 with a smaller rebound than expected and with high commodity prices, a strongly negative real interest rate in the US, Great Britain, Europe and Japan, the year 2022 starts with great uncertainties. We will review the main global variables at play in the year and the repercussions this may have on Latin America.

The US economy, with large fiscal deficits, has very low growth rates and does so with the support of a very expansive monetary policy that has been partially responsible for inflation in the world. What is unprecedented is that the rate of investment does not seem to be altering.

What happened in 2021

Vie, 01/07/2022 - 20:12 -- anegrete

The rebound of the world economy was the great feature of the year 2021. Anticipated as strong rebounds, they were less strong for some than for others. Governments that injected money into public investment improved their recovery more than those that did not.

2021 has been the one with the highest inflation in the world since the 1970s with Brazil, Turkey and the United States leading the way, but followed by everyone else. The consequence is that central banks around the world initiated interest rate hikes as a way to contain inflation, so the GDP growth rate in 2022 will be very low overall.

It was a good year of economic rebound, but at the cost of high global inflation that central banks will have to face in the years to come. The recovery was rapid due to increases in government deficits and debt, and even so, spending still does not contribute to economic growth.

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