Outlook 2022: Kevin Thozet (Carmignac)

Outlook 2022: Kevin Thozet (Carmignac)

Outlook 2022 Vooruitzichten
Kevin Thozet-Carmignac-980x600.jpg

By Kevin Thozet, Member of the Investment Committee at Carmignac

What is the economic outlook for 2022?

2022 could be the year when we see both the economy slowing down and lasting inflationary pressures. Global economic growth is expected to continue on its deceleration path in 2022.

The economic cycle is maturing and global growth is facing several headwinds, which are expected to weigh on the pace of growth, namely: higher commodity prices, a cyclical and structural (linked to deleveraging) Chinese slowdown, tighter global liquidity in the wake of lesser monetary accommodation in emerging and developed economies, as well as impending passive fiscal tightening in developed markets after the fiscal largesse induced by the pandemic – one should not rule out the risk to see some form of seasonal COVID-19 resurgence slowing consumer spending either.

While at the same time this cycle should also be marked by higher inflation than what has prevailed in previous cycles, reflecting both more cyclical factors (energy prices, bottlenecks – with the risk to see some of them forming elsewhere) which should abate somewhat as we advance in the year, and the potential for more durable factors to form (mainly shelter and wages).

As such, 2022 could be the year when we could see BOTH the economy slowing down AND lasting inflationary pressures.

Another point of attention is that – being a relatively closed economy, an energy exporter and a global reserve currency issuer – the US is the least exposed to these headwinds. As such we could see the country’s decoupling from the rest of the world being one of the key drivers from both a macroeconomic and a market perspective in 2022.’

Global economic growth is expected to continue on its deceleration path in 2022.