HSBC Economic update / Fourth quarter 2021
In most major economies, the level of GDP is now roughly back to where it was before the Covid pandemic struck. But further waves of the virus could dampen activity during the upcoming northern hemisphere winter, especially in countries where vaccination rates are relatively low.
The recovery process continues to be hampered by product shortages and delivery delays. This situation, caused by elevated demand for consumer goods, will persist until patterns of demand revert to something akin to its pre-pandemic normal, something that’s unlikely to happen until well into next year.
Despite some downgrades, global GDP is still expected to expand by close to 6% this year, and by a little over 4% in 2022. The most significant downward revisions have been our projections for growth in the USA, China, Japan, and some other Asian economies.
Rates of consumer price inflation are climbing in many countries, and many central banks are starting to tighten monetary policy, whether through ‘tapering’ asset purchases or through raising interest rates.
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