• Covid-19 case resurgence, reduced monetary policy support and persistent supply chain issues to cloud global growth in 2022, according to the World Bank
  
• The European Central Bank (ECB) announces tapering of asset purchases, the United States (US) Federal Reserve speeds up asset purchases
  
• International oil prices decline rapidly on-month
  

It’s back to square one as we enter 2022, with the omicron variant of Covid-19 threatening global recovery. That, along with high inflation and supply-chain issues is dominating economic outlook at present. Put another way, after the rapid global economic rebound in 2021 from the recession of 2020, we may see a year of sober growth.

According to the World Bank’s Global Economic Prospects, “global recovery is set to decelerate markedly amid continued Covid-19 flare-ups, diminished policy support, and lingering supply bottlenecks” (January 2022). It expects global growth to slow to 4.1% in 2022 (from 5.5% in 2021).

One common factor between the growth trajectory of both years is the increasing imbalance in the recovery of advanced economies (AEs) vis-à-vis emerging economies (Ees). 2021 saw AEs rebound relatively faster than EEs, the latter constrained due to reduced policy support and inequitable vaccine access. In 2022 as well, while output in AEs is projected to return to pre-pandemic trends, EEs are expected to remain below the trends even in 2023, stated the World Bank.