2022: What to Expect for the Year Ahead
After another year ravaged by COVID-19, climate change, and trade tensions alike, countries across the globe lurch into yet another pandemic era with the arrival of 2022. However, unlike its predecessors, 2022 has been projected as the landmark year expected to drag the world out of its pandemic-induced slump.
While 2021 may have had its fair share of lows as informed by the coronavirus and its resulting repercussions on the global market, its final quarter witnessed a string of positive developments despite mounting Omicron infections — a harbinger of better days in the new incoming year.
COVID-19’s impact on the global economy
The onset of the COVID-19 pandemic in March of 2020 triggered a series of misfortunes marked by economic instability and public health concerns. Since then, it has continued to wreak havoc in global trade and has remained in the forefront of informing market trends and performance. However, 2022 has been predicated as the era of widespread economic bounce-back in the wake of the pandemic.
According to Marko Kolanovic of J. P. Morgan, “2022 will be the year of a full global recovery.” Kolanovic has contended that the global widespread vaccination drives coupled with the increased availability of vaccines and booster shots, are sure to check surges and allow for the development of suitable medications, thereby impressing a positive impact on the economy. Although the virus is not expected to be completely eradicated this year, it can possibly be reduced to an endemic in contrast to its current position as a global pandemic.
Fed-sanctioned interest rate hikes
As announced in the previous year, the U.S. Federal Reserve is all set to implement as many as three interest rate hikes in 2022 in a bid to curb the inflation caused by the pandemic. The Fed will reportedly increase its target for funds by 75 basis points extending between March and towards the end of the year.
While the Fed’s monetary tightening is not likely to impact the central banks of Japan, Switzerland, and China, it will, however, compel other central banks to adjust their policies accordingly.
OPEC+’s oil production plans
Following a watershed year in 2021, oil kicked off the New Year on a positive note. The Organization of Petroleum Exporting Countries and its allies (OPEC+) have recently reached a collective agreement to adhere to their original production plan to meet rising global oil demand despite the climb in COVID-19 infections. This comes as favorable reports indicate the comparatively milder symptoms of the Omicron variant that would result in lesser hospitalization and mortality rates. The OPEC+’s current agenda is to increase their production by 400, 000 barrels per day (bpd) for the month of February.
The year of Crypto
Crypto is expected to prosper in 2022 as countries in Europe, the United States, and India are expected to review their travel policies. Ethereum will be moving to a more environment-friendly blockchain Proof-of-Stake (PoS) mechanism from its previous energy-consuming PoS mechanism. Polygon is also expected to accommodate the utilization of more digital coins in addition to the present number amounting to over 6,000, which can potentially flatten the latter’s value.
Despite the many threats posed by the pandemic and its resulting consequences, the world is expected to stay steady on its path to overall economic recovery following advanced research and the increased availability of vaccines to counter current and possible future surges. Additionally, with world economies increasingly gravitating towards a green approach in view of climate change, avenues for global advancement will continue to rise.