ASR Economics Quarterly: Growing Pains

A supply-constrained recovery

Supply-side disruptions and a resurgence in Covid cases have led us to downgrade our near-term growth forecasts and raise our 2021 inflation numbers. The persistence of these two shocks is critical to the economic outlook for the next twelve months.


Delta concerns aggravate demand-supply mismatches

The good news is that Covid vaccines are working, and most economies should have over 90% of their population double jabbed within six months. This in turn should allow supply chains to operate more efficiently, and backlogs to gradually recede. 


Growth-inflation trade-off to improve in 2022 

The upshot is that demand has been deferred rather than destroyed; our near-term downgrades are matched by upgrades to 2022. With inflation also likely to fall next year and central banks keeping policy loose, the outlook looks benign for investors.

ASR Economics Quarterly: Growing Pains