LlewellynConsulting’s Ten developments to watch for in 2021, and beyond details what we judge most likely to happen; and pays particular attention to detailing what we see as the main risks and uncertainties.
- There is growing recognition of the existential threat of climate change, but not all economies are set to cope well with the transition.
- Nor will every country adequately manage the disruptive impacts of technological change, let alone turn them to their advantage.
- Vaccines offer the hope of a sustainable recovery, but many uncertainties remain, and normality is likely some way off.
- Inflation is likely to remain historically subdued in 2021, but the picture thereafter is less clear – with risks in both directions.
- Monetary policy stands to become yet more unconventional, even if there is a reluctance to embrace more negative policy rates.
- With interest rates so low there is no urgency for fiscal consolidation, but this may not prevent premature calls for budgetary consolidation.
- The seemingly inexorable trend towards outright monetary finance need not necessarily lead to inflationary catastrophy.
- Rarely have good supply side policies been so important, yet policy performance in this area is likely to vary considerably across countries.
- Populism has burgeoned for powerful reasons, and it would be optimistic to expect a new incumbent in the White House rapidly to turn the tide.
- A potential cascade of defaults in the non-OECD economies may require innovative solutions if serious consequences are to be contained.
