Outlook 2022: Pandemic Effects to Recede, Policy Starts to Tighten

COVID-19 Outbreak

Outlook 2022: What you need to know about the year ahead

As we head towards the second anniversary of the COVID-19 outbreak, the virus remains a key concern for investors. While some countries are increasing vaccination rates, others are seeing new outbreaks – and late November saw the emergence of the new Omicron variant.  


Nonetheless, we expect major economies to continue their post-pandemic recovery. GDP growth in 2022 will likely be down on 2021’s rebound-driven numbers, but we still expect solid economic expansion.  


Any unexpected shocks could raise questions about the ability of the global economy to sustain its pace of recovery. The coming year is likely to see inflation remain a concern, while interest rates will start to rise in many major markets as central banks tighten monetary policy. 


Video filmed on November 19th, 2021

AXA Chief Group Economist, and Head of AXA IM Research, Gilles Moëc said: 2021 was a year of fast decompression, with demand catching up quickly as economies reopened, exerting significant pressure on supply, triggering a consumer price rise not seen for decades. We believe 2022 will be a year of gradual absorption of the pandemic shock, with robust but less spectacular GDP numbers, as much of the catch-up is now behind us, and a normalisation of supply conditions allowing inflation to slow down. This would allow central banks to maintain a prudent approach to the pace of policy normalisation. 


“It has become impossible to think about the macro outlook without considering the impact of the fight against climate change. An essential part of the process is to reallocate capital towards the sectors and businesses which are transitioning to a net zero economy – the investment effort needed to get there is going to be massive and is already becoming tangible, which we believe will bring a positive contribution to economic growth over this forecasting horizon already.” 


Below we outline our summary outlooks for key countries and regions in 2022 and into 2023.

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