Overall, 2022 inflation would be close to 2% by the end of the year. If economic policy in 2022 is successful in relaunching the economy, we forecast economic growth could be around 3.5% for the year. However, even in this positive event, we expect underlying potential growth to be lower due to the structural damage caused by two years of lockdowns and recession. We estimate that underlying potential growth will fall to around 4.25%, compared to 4.75% in the pre-crisis period. The loss of growth potential has to be added to the lost income in the last two years.

Source: The Edge Markets February 03, 2022 03:31 UTC