Overview
Economic recovery from Covid-19 tops the list of themes for 2022 globally in the latest monthly survey of our 156 analysts, just ahead of inflation and interest rates. “Omicron has made January worse, but has sped up the recovery and the path (of Covid) to endemic,” says one healthcare-focussed analyst.
Regionally, however, there are differences. Analysts in both North America and Asia (ex-China ex-Japan) point to the pandemic as the biggest concern, while European and Japanese analysts both put inflation as their key theme. Price growth has soared to its highest in 40 years in both Europe and the US, prompting the Bank of England to raise interest rates and the Federal Reserve to indicate it will lift rates soon and end asset purchases. Neither the European Central Bank nor the Bank of Japan, weighed down by long periods of low inflation, are under as much pressure to follow suit.
For those covering China, a range of concerns underlines the uncertainties over the property industry and broader growth as the country celebrates its New Year. “The outlook remains pretty mixed, with concerns over the real estate sector and potential knock-on effects to other parts of the economy weighing on activity,” says one China analyst.
At a sector level, utilities analysts stand out as saying their year would be dominated by ESG issues and decarbonisation. The sector will need to raise substantial new capital as it seeks to deliver a more sustainable, renewables-based power market. “There is a general consensus that inflation will be around for a while,” says one utilities analyst covering emerging markets. “The decarbonisation trend continues to accelerate each year faster than both the year before and expectations.”
Look out for our Annual Analyst Survey 2022, published later this month, for more insights on the trends liable to shape the coming year.
