Covid-19 over the past two years, the most prominent impact on the global economy is the evolution of the economy to “stagflation”: first, curb demand. Due to the limited consumption scenario, the recovery of global service consumption is slow. Second, push up inflation. After the epidemic, the subjective enthusiasm and objective ability of labor participation decreased, but the epidemic has greatly increased the demand for housing and durable goods. The change of demand structure and the limitation of supply capacity have led to a sharp rise in global inflation. Third, there are signs of “anti globalization”. The serious supply chain bottleneck problem under the epidemic makes developed countries pay more attention to the stability of their own supply chain and begin to tend to converge the supply chain inward, which will also boost the inflation level in the medium and long term.
The trend of “stagflation” brings new challenges to the monetary policy operation of major central banks. With the recent inflation momentum, the Fed “changed from a dove to an eagle”, which surprised the market. Emerging economies such as Russia, Brazil, Turkey, Mexico and Chile have launched “preventive” interest rate hikes from the perspective of preventing capital outflow, but this has brought greater challenges to their economic recovery. Since late November, the Turkish Lira has plunged again, and the Mexican Peso has also shown a momentum of rapid depreciation. However, thanks to good epidemic prevention and control and stable operation of the industrial chain, China’s monetary policy space and autonomy are “unique” in the world. Recently, the RMB exchange rate has remained strong against the background of the sharp strengthening of the US dollar.
On the issue of covid-19 influenza, there are still two challenges to be solved: first, the current popularization of vaccines in less developed countries is still insufficient, which provides a natural “test field” for the continuous variation of the virus and breeds the risk of uncertainty in the evolution of the epidemic in the future. Second, the influenza of covid-19 still needs to make sufficient progress in specific drugs. The possibility of more malignant variants still cannot be avoided. For example, it remains to be seen whether Omicron, which is obviously more infectious, will lead to higher severe and fatal rates; At present, the basis for relaxing prevention and control with low mortality may not be solid enough. For example, the statistics of covid-19 deaths in the United States may be systematically underestimated.
For China, maintaining the dynamic clearing strategy and observing the “first try” of developed countries should be the best strategy, so as to produce an “opening gap” with developed economies in stages. In the face of highly infectious mutant strains such as Omicron, China needs to take more stringent epidemic prevention measures, which may increase the downward pressure on the economy in 2022, thus putting forward higher demands and greater challenges to the macro-control policy. On December 6, the central bank announced a comprehensive RRR reduction of 0.5 percentage points to support the development of the real economy. On the same day, the Politburo conference release stressed that “efforts should be made to stabilize the macro-economic market”. The in-depth adjustment of the real estate market is the core reason for the increased pressure on steady growth. The emergence of Omicron virus undoubtedly also boosted the demand for policy stability. Looking forward to 2022, we can look forward to the effective and “front” development of fiscal policy, the easing and adjustment of industrial policies such as dual control of real estate and energy consumption, and the directional and restrained easing of monetary policy.
