Life After Peak Growth, Peak Inflation, and Peak Policy Accomodation
Perhaps surprisingly given all that has transpired in the global economy over the last six months, our global growth forecasts have changed very little since March. In June, we raised 2021 global growth by just two tenths to 5.9% and the September update left that number unchanged. Admittedly, there have been some changes to country-level forecasts but they offset each other. In other words, incoming data has confirmed expectations for a robust recovery that nonetheless remains constrained by Covid and supply-chain limitations. A noticeable but not dramatic downgrade to China’s 2022 growth (now at 5.0%) drove a slight reduction in 2022 global GDP growth despite modest upgrades in several advanced economies. Even so, the big picture remains one of rapid, well-above-potential, global growth for a second consecutive year.