The year 2022 might bring some cheer as 61 out of 132 major economies and half of the top 10 economies are expected to cross their pre-pandemic levels of economic output, says a new study by Dun & Bradstreet, a leading global provider of B2B data, insights and AI-driven platforms. In its whitepaper titled, “Consumer Spending: A beacon of hope for economic revival”, Dun & Bradstreet has also analysed the factors underpinning the increase in consumer confidence levels, as well as the potential factors that can generate stark divergences in the economic growth pattern of countries.
One of the leading indicators that offers hope for this optimistic growth outlook is the increase in consumer confidence levels, which has already raced to pre-pandemic levels across most economies. According to Dun & Bradstreet, the increase is underpinned by five major factors, namely, improved public health led by vaccination, improving economic activity supported by easing of restrictions, a pile-up of excess savings during the pandemic, improving labour market conditions, and the wealth effect led by robust asset appreciation.
Dr Arun Singh, Global Chief Economist, Dun & Bradstreet said, “An improvement in public health and the perceived stability of future income can unlock sizeable pent-up demand as households draw down on excess savings accumulated during the pandemic. Given that household consumption expenditure accounts for 50% to 70% of the Gross Domestic Product (GDP) in major countries, we could see a robust economic recovery.”
The percentage of disrupted companies globally has reduced to 31% during early-October 2021, compared to 41% during January 2021, according to data from Dun & Bradstreet’s COVID-19 Commerce Disruption Tracker.
The latest real GDP readings displayed a positive trajectory in countries such as India, Argentina, Australia, Brazil, China, France, India, South Korea, UK and the US. Similar momentum is expected for other economies in the second half of 2021, supported by the easing of restrictions which is expected to result in a decline in unemployment and economic inactivity levels.
Dr Singh added, “There will be significant regional disparities in economic revival. Furthermore, there are possible risks emerging from new variants of the virus, vaccine inequity, fragilities in the global supply chain and elevated maritime freight costs. These pose varying levels of business opportunities and risks for those engaged in conducting commerce across borders.”