OBELA Analysis

The COVID-19 crisis has not only made the world's existing inequalities even more evident; it has

After a 2021 with a smaller rebound than expected and with high commodity prices, a strongly negative real interest rate in the US, Great Britain, Europe and Japan, the year 2022 starts with great uncertainties. We will review the main global variables at play in the year and the repercussions this may have on Latin America.

The US economy, with large fiscal deficits, has very low growth rates and does so with the support of a very expansive monetary policy that has been partially responsible for inflation in the world. What is unprecedented is that the rate of investment does not seem to be altering.

The monetary policy responses to the economic and health crisis due to covid-19 were to lower interest rates, the historical amounts of liquidity injected by central banks, and loans to the financial sector.

The implemented monetary policy, known as "quantitative easing", had the objective of halting the fall of the stock market, stimulating consumption, investment and employment which, in turn, would favor economic recovery.

The upcoming normalization of monetary policy will be a challenge for central banks. The experience gained with the 2008 crisis shows that normalization is a medium and long-term policy and there is uncertainty about what, how and when it will be.