[Economics] 10 Threats To Global Economic Recovery And Certain Are The Greatest Dangers For Latin America

[#Wittels-]

 

Gone are the worst moments of the pandemic, but the scars remain.

After a deep global economic contraction last year and a wave of economic stimuli deployed by governments to deal with the situation, take-off has begun to advance little by little and unevenly in the different regions of the planet.

With vaccination processes underway in most countries, economies are raising their heads. However, the balance remains precarious.

Bottlenecks in global supply chains, rise in energy prices, the threat of new variants of the coronavirus, high levels of indebtedness and the increase in inflationary pressures, are some of the challenges that are making the way a little more difficult to navigate.

Looking at what awaits us next year, a group of experts from the British consultancy Economist Intelligence Unit (EIU) selected the 10 biggest global risks that can affect economic growth and inflation.

 

The research results published in the report "Risk Outlook for 2022" anticipate a considerable economic increase of 4.1%.

But that can change overnight, if some of the risks skyrocket and the rules of the game change.

 

 

A fall in Wall Street is one of the most likely scenarios.

These are political, military, economic and environmental risks that, with a greater or lesser probability of materializing, are latent and could be triggered if the necessary conditions are generalized, the study points out.

Ten risks
These are the 10 risk scenarios posed by the EIU:

 

The worsening ties between the United States and China forces a total separation in the world economy
The unexpectedly rapid monetary tightening leads to a crash in the US stock market.
A real estate slump in China leads to a sharp economic slowdown
Tighter domestic and global financial conditions derail recovery in emerging markets
New variants of covid-19 emerge that have been shown to be resistant to vaccines
Widespread social unrest weighs on global recovery
The conflict between China and Taiwan breaks out, forcing the United States to intervene
Ties between the European Union and China worsen significantly
Severe droughts cause famine
An interstate cyberwar paralyzes public infrastructure in major economies
"These risks are more serious than those we have analyzed in the last three or four years," Nicholas Fitzroy, senior analyst at the EIU, tells BBC Mundo.

Not only because the threats are more intense, but because they occur in an economic context marked by the effects of the covid-19 pandemic.

Among them, rising inflation.

 

 

When comparing the different regions of the world, the most difficult recoveries will be in countries where vaccination programs are progressing at a very slow pace, says the expert.

On the other hand, those countries most exposed to inflationary pressures will also have more to start the economic engine.

And those with a strong supply of imported products will be more exposed to dependence on difficulties, as has happened to Europe, for example, with the import of gas.

 

The three most likely scenarios
When looking at the combined probability and impact of the various scenarios, Fitzroy argues, there are three of them that are at the highest risk level.

"Widespread social unrest is the scenario most likely to occur," argues Fitzroy.

 

It is a trend that was present in 2019 in different regions of the world and that has a high possibility of returning, he explains, considering that economic inequality has increased with the economic recession that the world faced as a result of the pandemic.

The other two scenarios are closely related to inflation and tighter monetary policies that drive up interest rates.

"There may be a fall in the US stock market. In terms of probability, it is an increasingly significant risk," says the economist.

And the third most likely scenario is that tighter domestic and global financial conditions, with higher interest rates, derail the recovery in emerging markets.

 

Link: https://www.bbc.com/mundo/noticias-59081381