Where to from here? [Charticle]
The negative impact of the pandemic on major markets was relatively short-lived due to extraordinary government stimulus coupled with the success of vaccine roll-outs globally (SA still has work to do). This has helped to turn 2021 around. 2022 still looks rosy… for now.
The charts below represent consensus in the views of a number of global economists, which are updated regularly. These illustrate a change in forecasts from “then” – the height of the crisis in 2020 – to “now” – the last quarter of 2021. As the crisis unfolded, with a smoother, less severe outcome and more data has become available, economists have significantly improved their outlook for the main regions.
There are still large differences between top and bottom forecasts, indicating a wide divergence of opinions and current uncertainties. Refer to Policy GIGO: Living in a time of noisy data. It also means there is an elevated risk of large forecast errors.
Supply disruptions and concerns about debt defaults in China’s property market may provide a reality check to these forecasts, limiting any post-crisis exuberance. China’s growth outlook is also being downgraded by Western economists. In this edition of STANDPOINT, our Economist, Ndivhuho Netshitenzhe, provides an in-depth analysis of China’s current challenges. For now, we can only grow from last year’s low base, and 2022 still looks strong. In the longer term, there are too many factors in the mix. Beyond 2022, forecasts are highly subject to revision.