Will 2022 be a normal year for world economy?

The present world economy is looming as several market changes are taking place around the globe. Be it the energy crisis, or the fall of China’s property market or the high inflation in most economies; economists are in an acute situation to predict whether 2022 would be a normal year for the world economy. 

Image source: Pixabay 

The world economy consists of production and consumption of goods and services, trade between countries, fiscal and monetary policies, financial values and economic management. The COVID-19 pandemic has significantly affected the world economy. However, the pandemic is not the sole variant for the current market crisis. There are various sectoral changes too behind the havoc. 

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The current scenario 

With mass vaccination, adaptation to the new lifestyle and better immunity, the world is finally entering into the revival zone. However, the recovery period is taking a toll on the world economy. The pandemic has disrupted the supply chain management; because of which there is excess demand in the market; and thus, high prices. 

Will 2022 be a normal year for the world economy?

In October the world food price index reached a 10-year high record. The inflation has been consistently rising for the past three months. Several manufacturing economies like Germany are undergoing the highest inflation rate since the early ‘90s. Additionally, the current inflation in oil prices has caused higher transportation costs. Prices of perishable food items are also peaking high. 

The current circumstances are dire as thousands of businesses are still struggling to keep their feet stable in the market, millions have lost their families and thousands of young people and women are looking for jobs in the market. 

If wages had also been rising at the same rate as the prices of goods and services are rising, the problem wouldn’t have been so difficult for millions.

Image source: Pixabay

2022 predictions

Several economists around the globe are saying that the current rate of high inflation and supply chain disruptions are temporary. Additionally, it is predicted that by 2022, the world market will have enough time to stabilise its supply chain; thus, oil and other commodity prices will decline or at least stabalise. 

However, if a return to normal is expected in 2022, it will only be a partial return. Looking at the practicality of the situation, the supply chain will remain disrupted at least for the first half of 2022 as ports remain congested and transportation costs surge. 

Additionally, the Chinese economic slowdown is a significant factor in the current world economy crisis. Additionally, economists predict China’s recent policy changes for the business sector will remain a key issue till 2023. 

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Bottom line 

Conclusively, it can be said that recovery will take a better shape in 2022. The market may not be as unstable as it is at this hour. However, it is still difficult to predict if 2022 will be a normal year for the world economy, keeping in mind the unpredictability of global trade.