However, across the developed world, the overall policy stance should remain accommodative. Central banks will move prudently, if at all. Fiscal policy will be less stimulative, but a lot of the previous push has been stored in the form of excess savings by households, which has created a reserve of demand for 2022.
Ultimately, the key feature of the shape of the recovery next year may well be that, contrary to 2020 and 2021, it will not be a one-size-fits-all trajectory.
Across the world, economic activity had been remarkably synchronised in the first phases of the crisis because beyond the timing of the Covid wave almost every government and central bank initially followed the same recipe – massive fiscal stimulus accompanied by loose monetary policy – including in emerging countries, which, in past global crises, had usually been unable to follow developed nations in all-out demand support because of their fear of building up the conditions of their next punishment by the market. This synchronisation is coming to an end.
Gilles Moec is group chief economist at Axa Investment Managers
