Economic Outlook 2022: Strong but uneven growth

Potential complications related to the omicron and other virus variants could further slow down the recovery and create additional global imbalances. As long as the vaccination rates remain below the threshold needed to secure herd immunity, potential new lockdowns could keep recovery uneven and incomplete.

Political risks are also on the radar this year and with it, the risk of Covid-19 crisis (mis)handling, which is likely to take center stage in national polls. Key votes will be taking place in Portugal, Sweden, France and Hungary. The two largest global economies, China and the U.S. (midterm elections) will also be heading to the polls, as will Australia, Brazil, and India.

In emerging markets, voters in the Philippines, Columbia, and Brazil will cast their votes. On the geo-political front, the U.S.-China relationship is likely to remain strained.

In addition to increasing the vaccination rates, the key policy priority should be aimed at calibrating the right level of support to the pace of the recovery, while gradually shifting toward more targeted measures focusing on growing firms and sectors.