Deutsche Bank singles out the 10 issues that will concern us in 2022.
Every year, analysts try to "predict" next year's trends, jointly finding what is expected to concern the world economy the most with many questions and many concerns.
1. An economy in overheating
Despite the Omicron mutation, most estimate that next year will put us in a much better position against the coronavirus. This, however, will result in the emergence of an economic environment of high growth and high inflation.
In order to curb the dynamics of revaluations, central banks are likely to tighten monetary policy and withdraw supportive measures.
However, all this requires careful handling, as there is a risk of excessive or delayed action, which can lead to another phenomenon, that of stagnant inflation. That is, a high inflation, which is combined with anemic growth.
2. Optimism for Covid-19
The outlook for the coronavirus pandemic in the northern hemisphere is not the best, given the recent outbreak.
However, there are reasonable hopes that things will go smoothly in 2022. The most cost-effective drugs and the increase in vaccinations have brought the world community into a state of better pandemic management.
And this, despite the emergence of new mutations and new variants, which, however - as it turns out historically - bring us closer to the end of the pandemic (they are less and less dangerous).
3. Labor market
The labor market recovery is expected to be more than dynamic in 2022. Already, many workers are quitting their jobs in search of a better job. This is the phenomenon of the so-called Great Resignation.
At the same time, employment levels have been reminiscent of pre-Covid eras for months, with unemployment falling sharply in all of the world's major economies.
Of course, this whole situation also has negative consequences, as the increased demand for staff contributes to the intensification of inflationary pressures (labor shortages).
4. Corporate efficiency
To date, most companies have "grown" through acquisitions and mergers, ignoring their organic growth. This is now expected to change, with investors focusing on the return on corporate assets.
After all, the administrations will not be able to drastically increase the profit margin (due to price increases and shortages), while at the same time, the regulatory framework is expected to become stricter, setting new barriers.
5. Inventory saturation
In 2022, companies will fill their… warehouses. Turmoil in supply chains and wider market problems are likely to force companies to acquire a huge stock of products. In fact, despite the multiple shortages of basic goods, there is a large increase in pre-orders in view of the holidays.
6. The rebirth of supervisory authorities
Whether they like it or not, companies will be called upon to face stricter competition rules in 2022. It is a common secret that the easing of recent years has led to widening financial inequalities and a reduction in the workforce.
7. Finally the free money
With inflation hovering at the highest level in recent years, central banks are forced to turn off the cash flow switch by tightening monetary policy.
And the question is how this will affect the "addicted" stock markets, which are certain that at least in the beginning, they will be shocked by interest rate hikes.
8. Concern about space
2022 may be the first year of tensions over the potential for space militarization. Especially since more and more countries are gaining a presence outside the Earth's borders.
The main problem is that the majority of these countries do not intend to agree to the creation of new rules for space, which could lead to the "wild west" phenomenon.
9. Digital currencies from central banks
Also known as the CBDC, the question is no longer whether they will become a reality, but when and how. Today, 86% of central banks are working on relevant projects, while 60% are already experimenting in individual sectors.
It is estimated that in the next five or six years, the vast majority of countries will have their own CBDC, a trend that has greater momentum in emerging and developing economies.
10. ESG
ESG (Environment, Society and Governance) bonds begin and become mainstream. Since the outbreak of the pandemic, editions have tripled to more than $ 45 billion.
At the same time, a large proportion of companies see ESG bonds as a means of improving the rating of international companies, as reflected in a relevant survey.
Source: Lifo.gr