Recent developments confirm the macro outlook has become more bifurcated. On the one hand, global aggregate demand remains at strong levels but growth momentum has peaked and market participants are reassessing the growth environment. In the US, for instance, economic growth is probably going to slow from an estimated 6% to 7% this year, to somewhere around 3% to 4% by the end of 2022.
On the other hand, the macro stimulus measures of the developed economies will provide them with at least one more year of above-trend growth. These policies had supercharged the recovery from the historically unique coronavirus recession – which the National Bureau of Economic Research (NBER) recently confirmed as the shortest on record.
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Note: The next edition of the LGT Beacon is scheduled for September 2021.