As the end of 2021 approaches, it’s time to start thinking about the future. What’s going to happen in 2022? The answer is unclear, but there are a few big risks to keep an eye on….
#1 The effect of omicron 🦠
We don’t have conclusive information on omicron yet – while it seems more infectious than previous variants, it also might be less deadly.
- But… if evidence shows the virus is more deadly, countries are likely to go back into lockdown, dragging down the economy.
- Some estimate the UK’s growth next year could slow to 4.2%, down from an estimated 6.5% in 2021.
#2 My stuff is getting expensive 💸
Inflation is a big concern. The US thought that it would end 2021 with 2% inflation, but instead, it’s nearly 7%. While some forecasts predict inflation should drop soon, a further price increase is possible.
- Climate change could continue to disrupt crops, pushing up food prices – we’ve seen it happen with coffee and wheat already. (Our wheat story here)
#3 Could China slow down? 🐌
China’s economy has been dragged down by issues like covid lockdowns, energy shortages, and the slowing property market. As we get into 2022 though, these problems could continue.
- As China maintains a zero-Covid strategy, lockdowns may affect its growth if omicron makes its way into the country.
- The property market is especially concerning, as sales from developers have fallen in the past 5 months – 1/4th of China’s economy comes from real estate.
That sounds quite worrying 😬 True…but there are a few good signs.
- Households have more savings than normal due to not spending much during lockdowns – the economy could recover quickly if the money is spent.
- Governments like China have already pledged to support their economies (more on that here)
🐿️: Who knows what the future holds? I hope it’ll be a good year!