Amid growing concern globally over the rising cases of Omicron variant, a London-based research institute, the Centre for Economic and Business Research (CEBR), has predicted that global economic output is set to exceed the $100 trillion mark for the first time in 2021, two years ahead of the previous forecast.
CEBR in its World Economic League Table report obtained by Persecondnews. com said the continued economic recovery from the pandemic will drive the global economic growth, however, the year-end emergence of the Omicron variant of COVID-19 is a reminder that the pandemic is still a threat, even in highlyvaccinated societies, The pace of the recovery is much stronger and there is “substantially more mo-mentum” going into 2022 than the think-tank has previously envisaged. It noted that: “A year ago, we hoped that the economic effects of the pandemic would wear off relatively quickly. And in one sense they have. “We now expect world GDP [gross domestic product] in dollars in 2022 to be higher than we did prepandemic and to reach over $100tn for the first time.” The global economy, which tipped into its deepest recession last year, has bounced back strongly from the pandemic-driven slowdown.
The International Monetary Fund expects the world output to expand by 5.9 per cent this year and 4.2 per cent in 2022. CEBR, however, expects global economic growth of 4.2 per cent next year, up from 3.4 per cent it predicted a year ago. Inflation is another key issue for the global economy going forward. This year has been the year of supply constraints and rising inflation, with shortages of commodities, finished goods, shipping space and fossil fuels feeding into inflation in the second half of 2021. While some of these inflation sources cooled in the last weeks of the year, there are signsthatwageinflationisaccelerating around the world.
“The key question is whether inflation will largely subside of its own accord, with a modest degree of policy tightening and possibly a medium-sized fall in asset prices (of about 10 per cent to 15 per cent) but little impact on GDP, or whether bringing it down it will require something close to austerity,” CEBR said.