Ruchir Sharma, chief strategist and head of emerging markets at the American investment group Morgan Stanley, considered that the Corona pandemic changed the world for the second year in a row, although it did not touch everything, but it accelerated many things, such as the demographic decline and the revolution. Digital, which is a trend among others, may shape the New Year.
In an analytical report in the British Financial Times, Sharma said that the slowdown in the Chinese economy and “green inflation” in commodity prices and other trends may have a say during 2022, and these ten trends are:
Couples across the world during the past period had enough time and opportunity to have children, but they seemed to lack the desire to bring children to a world moving on the impact of closures, and the decline in birth rates led to a decline in economic growth globally, and this pace increased significantly during the epidemic period, including That’s a sharp drop in births in China. In the long run, this birth crisis will lead to a reduction in the labor force across the world, as the working-age population has already declined in 51 countries, compared to only 17 countries in 2000.
China’s share of global GDP during 2021 amounted to a quarter, i.e. a decline of one-third compared to the pre-epidemic period, due to several considerations, including the decline in births, high indebtedness and government intervention. loosening its ties with other world economies, and this could mean that China appears to have reached its peak as an engine of global growth.
Having escalated over the last 4 decades; Global debt grew faster during the pandemic, driven by government borrowing, and the total debt of 25 countries currently – including the United States and China – is more than 300% of their GDP, while no country was in this situation in the mid-1990s, and the money that continues to Central banks tend to inflate financial markets and deepen the debt trap, and debt-addicted societies seem to find it difficult to reduce them for fear of bankruptcies and contagion.
We are not in the seventies
The decline in the number of workers and the increase in government spending and public debt indicate that inflation rates may rise – but perhaps not to the double-digit levels seen in the 1970s – as some observers fear. It is assumed that during the year 2022, government spending will decline and technological changes will continue to curb prices, but the greatest danger lies in asset prices, especially since financial markets have grown 4 times the size of the global economy and when they collapse, they will often be followed by deflation.
It is known that the fight against global warming leads to an increase in the demand for green minerals such as copper and aluminum, but what many do not know is that this green trend reduces the supply of raw materials of all kinds. Over the past five years, investment in mines and oil fields has declined sharply, with the resultant “green inflation” in commodity prices, which recently witnessed its largest annual increase since 1973.
The productivity paradox
Hopes that the rapid reliance on digital services during the epidemic period would have ended the long decline in global productivity growth faded, as the increase during 2020 was limited to the United States, but it gradually faded late last year, and the evidence so far indicates that employees who work from their homes are spending Longer hours and lower productivity, so the paradox of poor productivity despite rapid technological change remains.
The virus has hit a world turned against itself with a decline in the flows of almost everything from trade, money and people except data, and it is likely that mobility on the Internet during 2022 will exceed all its predecessors since 2016, but with one change, in a clear challenge to hopes that the network will develop The spider is outside the control of governments, the authorities are doing everything they can to prevent data from crossing borders, and the most restrictive laws for this space appear in emerging countries, especially China, India and Saudi Arabia.
Our era is known as the “everything bubble” era where some data shows classic bubble signals from a 12-month price doubling to a frenzy trading pace, and these “bubbles” are stuck in cryptocurrency, clean energy and tech companies, and over the past year everyone has seen a drop of 35 percent. % or more from their peak, a level from which these bubbles rarely recover, but the positive thing is that technology bubbles like these often leave potential survivors giants behind.
Retail investors benefited for the 13th year from a rising global market; Millions of people in the United States and Europe have opened trading accounts for the first time and many have borrowed money to buy stocks at a frantic pace, but this mania rarely continues, suggesting that even if the stock market as a whole is not in danger, the most famous names among retail investors are probably in danger.
It seems that the growing hype about “metaverse” (the worlds of virtual and augmented reality) may lead to a decline in the size of the physical economy, but prices say otherwise; Where digital citizens also always need a physical shelter, and future technologies do not make material resources obsolete, as electric cars, for example, consume much more copper than gasoline cars, and behind every icon in the virtual world there is a human being and labor shortages raise wages even In the jobs most threatening with automation like driving trucks, it is premature to talk about tangible burials.