Are stagflation and recession on the horizon for G7 economies?


Looking ahead, the global economy will continue to grapple with lingering supply chain disruptions in the near term, while commodity prices are projected to remain elevated, leading to longer and more pronounced inflationary pressures this year relative to 2021. Moreover, as central banks tighten interest rates dramatically this year, with further Covid-19 related shutdowns and a worsening of the war in Ukraine still possibilities, the global economic outlook may continue to deteriorate as we enter the second quarter of 2022.

  • Insights from Our Analyst Network

Commenting on the latest supply chain issues, Andrew Hencic, senior economist at TD Economics, noted:

“Timelines around a sustained improvement in supply chains have been pushed back yet again amid the war in Ukraine and Covid-19 surge in China—to what extent, only time will tell. What is clearer to us is that so much will depend on how the demand side of the equation evolves in the coming months. If we’re right in our forecast, U.S. goods demand is poised to cool significantly in H2 2022 and into 2023, helping to ease supply chains leaving them less vulnerable to supply-side hiccups.”

Commenting on the global economic outlook with regard to the war and the pandemic, analysts at HSBC noted:

“To say that the global economic outlook is exceptionally uncertain is undisputable. Global growth will clearly be weaker than it would have been and inflation will be higher, potentially significantly so. Already the swings in commodity prices and financial markets have been dramatic and volatility appears set to be a feature of the outlook for the foreseeable future. Economic forecasts could be in a state of persistently playing catch-up as world leaders take decisions that affect the macroeconomic outlook. The challenges facing the major central banks grow ever harder.”


Try our portal now

Quickly and easily compare the latest forecasts for G7 economies across key macroeconomic indicators with FocusAnalytics





Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.

Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest