Advertisement
Macroscope | Why global economies should expect to see out 2022 in better shape than now
- Shanghai’s reopening and the Chinese government’s heavy-duty policy support for the Covid-19-battered economy are not the only good news
- The Fed’s firm handling of its interest rate rises also signals that US inflation can be tamed without the economy falling into recession, calming investor nerves
Reading Time:3 minutes
Why you can trust SCMP
2
The first half of 2022 has been a difficult year for both the global and local economies. In Hong Kong, the Covid-19 fifth wave added extraordinary pressure on the economy, not to mention the lives lost.
Advertisement
Globally, the worst military conflict in Europe since World War II is taking place between Russia and Ukraine. And a number of cities in China, including Shanghai, went into lockdown to avert an Omicron outbreak, threatening global production and supply chains.
In the US and a number of other developed economies, inflation is running at levels not seen in decades and the Federal Reserve has had no choice but to raise interest rates aggressively.
Not surprisingly, this combination of unprecedented challenges has meant investing returns have been disappointing so far this year.
These problems may not be completely resolved soon, but there are reasons for cheer as we approach the second half of the year.
Advertisement
Let’s start with China. The number of Covid-19 daily infections has started to decline sharply, which allowed Shanghai to loosen the lockdown restrictions on June 1. Meanwhile, the State Council recently held a nationwide meeting, which highlighted the importance of boosting the economy after the sharp drop in consumption in April, and possibly in May as well.
Advertisement