The economic clouds on the horizon for 2022

Vaccine inequality, supply chain breakages, rising interest rates and US-China tensions will weigh on the world economy in 2022, writes Phil Thornton

Supply chain issues could continue well into next year (Dan Kitwood/Getty)

Happy new year? Hopes that 2022 would herald a happier and more prosperous 12 months after the economic volatility of 2021 were dealt an early blow by the emergence of a new Covid-19 variant, but there are plenty of other challenges for the world economy in 2022.

Inevitably, the evolution of the pandemic will continue to be the most important driver of trends in both global economic and financial market outcomes. With the Omicron variant, governments across Europe – and doubtless soon in Asia and the Americas – will start to impose restrictions if case numbers, and particularly hospitalisations or deaths, rise.

But that is unlikely to be the end of the story. There are many more letters to go in the Greek alphabet, and the emergence of this variant is a reminder that the west will continue to reap the harvest of its failure to ensure an equitable supply of vaccines. The pandemic has yet to become boringly endemic. According to the campaign group ONE, at the end of the last full week before Christmas there had been just 20 vaccinations administered per 100 people in Africa, with almost 140 in Europe and 133 in North America.