Global Economic Outlook: Touch And Go

The Northern Trust Economics team shares its outlook for key markets in the month ahead.

As we enter the third year of the pandemic, recent economic developments have been both encouraging and troubling. The good news is that economic recovery has continued, even as policymakers continue their efforts to balance economic and public health. On the other hand, the challenges presented by Omicron have impaired both supply and demand as 2022 begins.

Fortunately, case counts in many Western countries are in decline, promising another round of reopening as spring approaches. This expectation has allowed policymakers to focus on elevated inflation and tightening labor markets. Multiple rate hikes are in store in the U.S. and the U.K.

2021 brought challenges that not many would have foreseen, from new virus variants to lasting supply chain disruptions. With headwinds fading and tailwinds present, the outlook for this year remains very good.

Following are perspectives on how major economies are poised to perform.