Biggest economic risks for 2022 revealed

The global economy will face sustainable development in 2022, but some risks remain, reported from Bloomberg.

Analysts cite the omicron strain of the coronavirus as an example: a more contagious and deadly variant would drag on economies. Even a three-month return to the toughest 2021 restrictions - countries like the UK have already moved in that direction - could see 2022 growth slow to 4.2%. At the start of 2021, the US was forecast to end the year with 2% inflation. Instead, it’s close to 7%.

With climate change bringing more disruptive weather events, food prices may continue to rise. Bloomberg Economics modeled what happens if the Fed delivered three hikes in 2022 and signaled it would keep going until rates reach 2.5%, pushing Treasury yields up and credit spreads wider. The result: a recession at the start of 2023. Fed liftoff could mean a crash landing for emerging markets. Higher US rates typically boost the dollar and trigger capital outflows - and sometimes currency crises - in developing economies. Some are more vulnerable than others. In 2013 and 2018 it was Argentina, South Africa and Turkey that suffered most. Add on Brazil and Egypt - to get the list of five at-risk economies in 2022, based on a range of measures compiled by Bloomberg Economics.

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