Nomura Holdings experts believe that against the background of tightening fiscal and monetary policy, as well as high price pressure - which will put pressure on domestic demand - the global economy may face the risk of stagnation by the end of next year.
Economists noted that given the fact that most major economies continue to feel the effects of the pandemic, their weak private demand carries risks of further slowdown in economic growth.
Nomura also said that the decline in corporate profits and household incomes will also have a negative impact on economic growth against the background of high inflation and a change in fiscal policy.
Economists reported that the US economy has recovered to "full demand" and therefore has a large cushion to absorb inflation caused by rising costs. They also said that if inflation in the US remains "dangerously" high in the first half of 2022, the Fed may resort to aggressive rate hikes, which will strengthen the likelihood that stagnation will be a more serious risk to the global economy at the end of 2022.
Nomura also noted that the European Central Bank probably will not raise the rate in 2022, based on expectations that inflation will fall below the ECB's 2% target.