MARKET REPORT SUMMARY GLOBAL ECONOMY Global Growth. The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID-19 variant spreads, countries have reimposed mobility restrictions. Global growth is expected to moderate from 5.9 in 2021 to 4.4 percent in 2022—half a percentage point lower for 2022 than in the October World Economic Outlook (“WEO”), largely reflecting forecast markdowns in the two largest economies. A revised assumption removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation and continued supply shortages produced a downward 1.2 percentagepoints revision for the United States. In China, pandemic-induced disruptions related to the zerotolerance COVID-19 policy and protracted financial stress among property developers have induced a 0.8 percentage-point downgrade. RISING CASELOADS, A DISRUPTED RECOVERY AND HIGHER INFLATION Thepandemic’s continuedgrip. With thepandemic continuing to maintain its grip, the emphasis on an effective global health strategy is more salient than ever. Worldwide access to vaccines, tests and treatments is essential to reduce the risk of further dangerous COVID-19 variants. This requires increased production of supplies, as well as better in-country delivery systems and fairer international distribution. Longer elevated inflation. Elevated inflation is expected to persist for longer than envisioned in the October WEO, with ongoing supply chain disruptions and high energy prices continuing in 2022. Assuming inflation expectations stay well anchored, inflation should gradually decrease as supply-demand imbalances wane in 2022 and monetary policy in major economies responds. Risks to the global baseline are tilted to the downside. The emergence of new COVID-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility and localised wage pressures mean uncertainty around inflation and policy paths is high. As advanced economies lift policy rates, risks to financial stability and emerging market and developing economies, capital flows, currencies and fiscal positions may emerge. (Extracted from World Economic Outlook Update, International Monetary Fund, January 2022) Global growth is expected to moderate from 5.9% in 2021 to 4.4% in 2022 Effective global health strategy is more salient than ever AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2021 056
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