After a deep recession in 2020 and recovery in 2021, we expect growth to slow across most regions in 2022. However, the global outlook for 2022, specifically growth rates, will remain well above trend, signaling another year of strong global demand.
Growth will be positive in nearly every country in 2022, with even the poorest-performing countries expected to see positive growth next year despite emerging markets feeling the lasting effects of the pandemic. The most interesting feature of the global picture continues to be the relatively poor performance of LATAM and ASEAN, which historically have outperformed global growth during recovery cycles. Keep reading for a breakdown of above-trend, slight downshift, and below-trend growth areas to watch as your business finalizes your 2022 strategic plans.
Above-Trend Growth: United States and Western Europe
The full reopening of Western developed markets in the second half of 2021 leads to slower, but positive and more normal, growth rates in 2022.The US and WEUR will continue to grow above long-term growth rates next year. The US will hit pre-COVID levels of aggregate GDP in late 2021, while as a region, WEUR will not hit that level until late 2022. The full reopening of the domestic service sector will lead to a substantial consumer pivot away from recent peak demand for consumer durables toward more growth in consumption of local services and tourism.
Slight Downshift: China
Chinese growth will fade as the government continues to withdraw policy support, especially on infrastructure spending.The Chinese government will continue to pull back support implemented to tackle the domestic COVID crisis, and export growth will fade from the peak levels seen during COVID, when there was strong global demand for consumer durables manufactured in Asia.
Below-Trend Growth: Latin America and ASEAN
LATAM and ASEAN face significant near-term struggles. A lack of fiscal capacity or willingness to spend, alongside tight monetary policy to prevent currency depreciation, hampers governments’ ability to provide policy support as local economies continue to reel from COVID-related disruptions, weak investment, and weak in-bound international tourism.
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