The Economist does not expect the American and global economy to return to normal in 2022 at a time when several problems still dominate the global economic situation, preventing it from recovering from the severe blow of Corona that it suffered two years ago.
In its report, the magazine refers to the great problem that the United States and the world are suffering from at the present time, which is high rates of inflation, with economists doubting that this inflation will be temporary, as well as the problem of disruption of supply chains in the world, and the increase in demand for goods in exchange for a shortage in demand. Services.
On inflation, the magazine said that economists have been saying throughout 2021 that inflation will be temporary, supply problems will subside, workers in rich countries will return to work, and energy prices will fall, but by the end of the year people and even central bankers themselves began to doubt that this could happen. .
And the American economist, Paulo von Serach, said in a statement to Al-Hurra website that the Corona pandemic caused “enormous destruction to the global economy due to the restriction of travel and production in the world, stifling supply chains, and increasing unemployment rates, and this is unprecedented.”
The Economist report says that global trade problems in 2021 were not caused only by supply disruptions, such as the closure of Vietnamese factories due to the pandemic, but also because there was an increase in demand in the United States and the world, and in the end there was no shortage of goods, compared to the significantly high demand. Unusual it.
For the global economy to return to normal, consumers need to spend more of their big money on services, such as going to restaurants and traveling, which is hard to do right now.
Unfortunately, the report says, economies are suffering from a shortage of workers needed for service industries to thrive, and there are no indications that workers are returning from vacations they took during the pandemic.
The report expects inflation to remain high in the first months of 2022, and even with an increase in interest rates, it will take a year and a half for the rate hike to have its full effect on the economy, according to central bankers.
In his statement to Al-Hurra, the American expert said that inflation rates in the United States reached about 6 percent for the first time in decades, and even with people receiving stimulus money, "they are unable to bear the costs of high prices in almost everything."
He expected the US Federal Reserve to raise interest rates at some point, to deal with the inflation crisis.
The report also expected that the slow growth in China would have negative repercussions on the world, with the continuing real estate crisis there.
Above all, the epidemic is not over yet, according to the magazine, and the virus’s strong spread again, if the strength of vaccines declines and new variables appear that vaccines cannot deal with, disrupt economies again.
The economist says to Al-Hurra website that the global economy has improved recently due to the vaccines and policies that have been followed, but Covid is not over yet.
"The global economy will not return to normal until Covid-19 becomes a disease that can be controlled," he adds.
With a supply problem, the report says, the world cannot repeat the trick of maintaining economic growth by using economic stimulus money, which increases consumer spending on goods.
The American economist agrees on this, saying that the more money is in the hands of American consumers because of the stimulus money and with the problem of supply, the demand increased more and the supply decreased more, which increased the pressure on prices.
The magazine suggests that the world's central banks take drastic measures to cut spending in order to avoid inflation, while making room for supply in the markets to adapt to new spending and working patterns, which are very different from what prevailed before.
"If normal life does not return in 2022, the alternative is a painful economic adjustment," the report says.
The analyst does not expect things to return to normal soon, "because of the problems caused by the epidemic, the consequences of which have not decreased, to the point where it can be said that there is an opportunity to return to what we were before." "We will continue to suffer," he says.
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