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A Snapshot Of The World Economy In August 2021

The economics team at Schroders has summarised the world’s economic outlook in August 2021 in an infographic, which will likely start to take effect in the months to come. 

In this snapshot, analysts indicate that pent-up US demand might create a boom and bust. The increase in consumer spending as facilitated by lockdown savings is the likely source of economic growth, however, experts warn that consumer spending could cool dramatically in 2022 as the saving rate builds back up.

With regards to climate change, the analysts make reference to the World Meteorological Organisation finding that the past six years (2015-2020) were the warmest on record. Based on this, the repercussions of global warming – such as floods and tropical cyclones – are likely to impact different regions of the world disproportionately.

On the energy export front, the analysts at Schroders point out that the transition to renewable energy implies a dramatic fall in long term demand for fossils. Energy producers may be motivated to extract reserves and increase production – however, they will be wary of driving energy prices too low. The need to keep energy prices low is validated by the fact that most energy exporters require an oil price of $60 per barrel just to balance public finances.