The global financial situation in 2022, after the coronavirus, is in a delicate balance. After a brutal drop in productivity in different countries, recovery is what everyone is talking about. After a brutal fall in productivity in different countries, the recovery is what everyone is talking about. That is why the financial situation of the United States and Latin America in 2022 are the first cause for concern today.
The first concern at the onset of the coronavirus was the immense number of deaths and the collapse of health services. In the achievement of the death toll and recovery of health services, other concerns began.
First, the quarantines began to affect companies and the labor market. Countries began to give special subsidies to keep the economy moving. They needed mechanisms for people to survive and respect the quarantine.
The global logistical problems generated by the pandemic have hindered trade. Since the closure of ports, airports, and restrictions on freight traffic. On television we have seen situations of shortage in the US shelves United States and United Kingdom. The lack of products in the shelves results from a mixture of more circulating money and a decrease in inventories.
Additionally, we add the massive absences that result from coronavirus infections.
To all the problems mentioned, we have the massive resignations of workers who did not want to expose themselves to contagion.
In this scenario, the United States and Latin America are in a worrying situation. Will the economies of the Americas be recovered in 2022? To learn the answer, we will analyze the situation of the world’s first economy and Latin American countries.
So today we will talk about the global situation of the economy in 2022 after the coronavirus and the prospects for recovery.
Table of Contents.
Does vaccination warrant the financial recovery?
Vaccination came to mitigate some of the most pernicious effects of the coronavirus, such as deaths and prolonged stays in intensive therapy units. Vaccination was the hope. But vaccination has not been sufficient because of the resistance to vaccination and the mutations of the virus.
Quarantines have remained as an effective tool for lowering contagion numbers. And although occupational absences are less severe, these have been prolonged. Long-term COVID is making havoc on business productivity.
In addition, quarantines not only affect classroom work but rather the displacement of goods. With chains of supply increasingly centralized in countries with cheap labor, the coronavirus came to show that it is not always the best strategy. The world is connected but a problem in the logistics chain affects the global supply and thus the prices of the products.
Many citizens remain outside the labor market. This causes labor to scarce and trigger labor costs. The shortage of labor coupled with lack of productivity is causing an increase in inflation. The latter is a bad symptom that is alert to many countries. In addition, inorganic money injected in the form of subsidies begins to overheat economies.
That is why the recovery of the world economy has not been as fast as it was expected. However, 2022 is expected to be the beginning of the recovery of the world economy. The United States is facing this recovery.
Then we will see what the positive indicators of recovery are in the U.S. and what are the greatest risks. Without more to add, let’s start.
What is the financial situation of the United States in 2022 after the coronavirus?
Inflation in America is the highest in 40 years. An inflation of 7% was recorded in 2021, a problem for the US financial situation in 2022
For those living in Latin American countries, 7% inflation may not seem to be worrying. However, for a country accustomed to inflation from 2% to 3% this can destabilize the economy. Remember that the dollar:
- It is the legal currency in many countries such as Ecuador.
- Also, its use is predominantly many other countries like Venezuela and Argentina.
- Represents 60% of the international reserves of the countries.
- 40% of countries’ international debt is issued in dollars.
- Most transactions between countries are made in dollars.
With this financial situation in 2022, we can see how the dollar’s weakness can also pose an important risk to the world economy. However, there are several indicators that show a positive outlook regarding the US economy and its financial situation in 2022. Next, we will talk about the indicators that predict the early recovery of the US and world economy. No doubt the global and U.S. financial situation will improve in 2022.
Indicators that show that the United States is recovering.
There are several indicators of the American economy that allow us to anticipate total recovery in 2022. These indicators are:
- Economic Growth: The GDP of the United States is currently greater than the pre-pandemic GDP of Covid-19. This is attributed to the economic stimulus policies implemented by the Government of Joe Biden. These aids materialized as food stamps and unemployment checks and stimulus to SMEs and individuals.
- Increased workers’ salaries: The average salary for US workers increased, improving their life prospects and driving the next two points.
- Savings level increase: Thanks to the average salary increase.
- Increased consumption: Economic growth and wage growth boosted consumption.
- Increased employment: In 2021, employment increased almost to pre-pandemic levels. It is expected that in 2022 it will recover completely.
- Decrease in the poverty rate: With the pandemic, poverty has increased. But since 2021, the figures have been improved. In 2022, poverty figures are expected to return to pre-pandemic levels.
The above indicators allow us to be optimistic. The United States will recover in 2022. But what about Latin America? Then we’ll find out.
What is the financial situation of Latin America in 2022 after the coronavirus?
The financial situation in Latin America in 2022 is quite different from that of the United States. Before the pandemic, the Latin American economies were stable but with limitations. The pandemic forced countries to borrow and create stimulus programs.
Now these countries face more poverty, indebted countries, and inflation with the rendered inorganic money. All countries have undergone post-Coronavirus inflation. But in Latin America this has been a pretty frequent problem.
In addition, they face slow growth worldwide. This will limit the sale and prices of commodities, the main source of income for Latin American countries. The burden of debt will also be a major burden for Latin America.
Gustavo Mirabal Castro is betting that Latin America’s financial situation will benefit from the recovery of the United States and the other major economies in 2022.
Latin America will have to wait for the US, China, and Europe to recover to begin receiving the benefits of greater commodity consumption. In the least 2022 does not look good for Latin America. But we can bet that 2023 will be the year of recovery for these countries.