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Economists and market analysts call the year 2022 a turning point.
Despite the fact that global economic growth has declined compared to the historical recovery in 2021, analysts predict that the new year will be better.
It is presumed that the change in monetary policy will lead to some decrease in liquidity in the market. Nevertheless, economists do not believe this will have a significant impact on economic activity. Most analysts expect global economic activity to grow by at least 4% next year due to stable consumption, as consumers will start using the funds accumulated during the quarantine period.
According to the chief economist and managing director for the economics of BMO Financial Group, Douglas Porter, the world economy will grow by 4.5% in 2023 and 4.0% by 2022.
Kristina Hooper, Invesco's chief investment officer, expects stable activity in early 2022. She believes that there will be a decline by the end of the year.
At the same time, economists from Bank of America have called 2022 the start of the balance sheet. They do not expect equilibrium from the world economy, but the fact that progress will occur is unambiguous. According to the Bank's forecasts, economic growth in the United States will increase by 4% next year, with most of the activity occurring in the first half of the year.
Michelle Meyer, the chief economist at BofA, also said that the Fed will raise interest rates, but will not disturb a stable situation.
Earlier in December, the Fed made it clear that it sees the possibility of three rate hikes next year. According to the CME FedWatch Tool, the markets are expecting the first rate hike to take place as early as May.
Wells Fargo currently forecasts global economic growth of 4.5%, while the US economy is also approaching 4.5% growth.
BofA chief economist Michelle Meyer recalled that pressure on consumer prices will remain elevated next year. In addition, the US Central Bank is not going to outpace the inflation curve.
In fact, most economists believe that the Fed will not use interest rates to curb inflation, which could reach 6% according to some forecasts.
Some market analysts warn that rising inflation could lead to stagflation; however, most economists consider this to be low risk in 2022.
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