October 14, 2021

The Forward View – Global: October 2021

Energy woes add to persistent supply bottlenecks in slowing global recovery.


  • We have revised our global economic forecasts lower this month –to 5.9% for 2021 (down from 6.0% previously) –largely driven by a weaker outlook for the United States (along with some downgrades in the EU, Japan and Canada). Our outlook for 2022 is also slightly weaker –at 4.5% (from 4.6% previously). We continue to anticipate global growth slowing to its long term average of 3.5% in 2023.
  • We expect quarterly growth in Q3 to be similar to that of Q2, helped by India where activity has recovered as COVID-19 countermeasures have eased.
  • The downward revisions to the outlook are in part driven the by persistence of supply bottlenecks in the global economy. This headwind may get even stronger given recent energy shortages and spikes in energy prices, which have led to production cuts, including in China. Higher energy prices will also weigh on consumers spending power. At this stage it is unclear how long these shortages will persist.
  • These disruptions, along with shortages of key inputs and rising commodity prices, have contributed to inflationary pressures, with both global producer prices and consumer price inflation currently elevated.
  • Global equity markets trended lower from the second week of September, due to the likely default of the Chinese property giant Evergrande, and broader concerns around China’s property market. This has also contributed to a large fall in iron ore prices.

For further details, please see The Forward View – Global (October 2021)