The world economy rebounded from the historic recession caused by the Covid-19 crisis better than many economists expected in 2021 but faces a harder path ahead in the coming year, forecasters have warned.
Progress will depend on the virulence of the pandemic, the ease with which inflation is tamed and the dispersion of the economic damage across countries and industries, they said, warning of a rising risk of monetary and fiscal policy errors as governments and central banks seek to respond.
“The easy part of this uneven global economic recovery appears over,” said Daan Struyven, senior global economist at Goldman Sachs.
Janet Henry, chief economist of HSBC, said the outcome was unlikely to be a “Goldilocks” scenario — not too hot and not too cold.
Most economists agree that the backdrop in most countries of a strong recovery combined with high inflation will make it difficult to balance supply and demand.
Simon MacAdam,…
