From The Editor

The seemingly never-ending pandemic is ominous, and the problems that plagued global business – such as higher energy and commodity prices, value chain bottlenecks and increasing transportation costs – threaten to slow down recovery in 2022, according to a January report titled Learning to Live with the Pandemic: Atradius Economic Outlook.

The authors, Chief Economist John Lorié, Economist Dana Bodnar and Senior Economist Theo Smid predicted the global economy will continue to take a hit in 2022.

According to the authors, the hopes during the summer of 2021 that the pandemic would eventually become endemic have been dissipated by the omicron variant, which is continuing to be transmitted globally and remaining uncontained. For 2022, the authors predict that inflation will increase, thus decreasing consumer purchasing power. COVID-19 and its variants make for an uncertain year ahead, indeed.

The forecast is for U.S. GDP growth in 2022 to be down to four percent, compared to 5.6 percent growth in 2021. For 2023, the authors estimate GDP growth of 2.5 percent. In addition, the report forecasts “high inflation, supply chain disruptions, record COVID infections and political impasses.” The report deems any adverse effects of COVID-19 variants, as well as its potential effects on the GDP, as “stagflation.”

According to the report, in the U.S., the core personal consumption expenditure inflation was 4.7 percent. Consumers expect inflation to rise, lowering their confidence. According to the report, the “Fed no longer refers to inflation in the U.S. as transitory and has shifted to a more hawkish stance.”