OUTLOOK 2022: Investing in the Great Transformation

As the global economy recovers from its pandemic scars and inflation makes its first comeback in decades, the world is preparing to face its greatest ever challenges: the energy transition to fight the inexorable climate crisis and the development of an inclusive growth model.

We believe that 2022 will be a pivotal year in this respect, encompassing a huge mobilisation of resources to succeed in both of these challenges.

3 Major Themes to Watch in 2022

Inflation – when economic growth starts to slowdown

Inflation will only become stickier, and is not likely to return to pre-crisis level due to:

  • Supply chain bottlenecks
  • Surging energy prices
  • Rebalancing towards higher wages and rising tax rates‎

1Source: Amundi Research. Data and forecasts are as of 8 November 2021. Forecasts are by Amundi Research. CPI: consumer price index.

2Source: Amundi Research. Data is as of 8 November 2021. Forecasts are by Amundi Research. DM: developed markets. EM: emerging markets.

3Source: Amundi, Bloomberg. Data is as of 2 November 2021.

Desynchronisation of Central Banks' Policy

Central Banks are walking on a tightrope: caught in a vice between slower growth and higher inflation.

Monica Defend, Global Head of Research

With the growth-inflation trade-off, Central Banks are now facing the dilemma of when and how fast to switch on/off the accommodation button. We believe there will be a divergence across Central Banks' fiscal and monetary policies.

Source: Amundi Research as of 8 November 2021. Illustrative map for monetary policies. Central bank stance refers to expected changes on QE or unconventional tools position throughout 2021 and early 2022.

ESG – Environment in focus with net zero investing

ESG mainstreamisation is no longer a mirage. The acceleration of ESG integration will help unmask the gaps of data availability and leading to adjustments in market prices, forming a positive feedback loop.

Source: Amundi, Bloomberg ESG ETF Dashboard, BofA Global Research. Data is as of 15 October 2021.

Key Investment Convictions for 2022

Source: Amundi, Barclays, Bloomberg, as of 31 October 2021 . DM = developed markets, EM = emerging markets.