DENVER, CO – A persistent pandemic, monetary tightening in the U.S., and slowing growth in China will present the most significant headwinds for the global economy in 2022.
According to CoBank’s Knowledge Exchange Division report, the global economy in the new year will experience weak growth led by strong consumer demand throughout much of the developed world.
Many consumers experienced at least one disruptive event in the past two years due to supply-chain bottlenecks and labor shortages. With an 18 percent increase in spending on goods in 2021, over pre-pandemic (2019) levels, demand exceeded the capacity of the supply chains and introduced a significant economic challenge.
CoBank suggests that the system has likely experienced the worst of the bottlenecks. The more significant issue in 2022 will be that of higher inflation.
Most businesses will pass higher operating and input costs on to their customers. Still, producers will need to find more creative approaches, including a decrease in chemical and fertilizer investments and possibly a shift to alternative crops requiring fewer inputs.
(SOURCE: All Ag News)