How each asset class, currency and sector of the S&P 500 performed in 2021
What experts see coming in 2022
Even in the best of times, it’s human nature to want to decode the future.
However, in times of uncertainty, we are even more anxious to predict what will come next. To meet this demand, thousands of tipsters publicly share their point of view as one year ends and another begins. Looking back, we see different levels of success in predicting the future.
In truth, experts are only guessing what will happen in the coming year. In 2020, hardly anyone had a pandemic on their bingo card. In 2021, the NFTs went completely under the radar of experts, and no one saw a container ship getting lodged in the Suez Canal in their crystal ball.
So why should we pay attention to predictions? Are they, like Barry ritholtz says “false, random or worse”?
On the one hand, these assumptions are supported by expertise and experience, so the accompanying analysis is informative. Perhaps more importantly, influential people and businesses are able to shape the future with their predictions. In some cases, feelings and actions can turn a prediction into a self-fulfilling prophecy.
Either way, whether for research purposes or for pure entertainment, we’ve sifted through hundreds of reports, interviews, and articles to see which predictions are generally accepted the most. Where do experts see the ball moving over the next year? Our bingo card sums up the top 25, and below we’ll dig into some of the trends that could shape 2022.
Vibe Check: what is the general outlook for 2022?
Based on the hundreds of predictions we analyzed, the general mood can be described as cautiously optimistic.
For starters, the global economy will likely continue to grow, but not at the rate of 2021. We have aggregated over 40 forecasts from reputable sources such as the IMF and Goldman Sachs to determine the median GDP estimates for the world and selected regions:
|Country / region||Median estimate of GDP|
Second, it is widely believed that monetary policy will start to tighten over the next 12 months. Here’s what big central banks should do:
Many experts have described an era of declining stock returns and increasing volatility. Many of the problems that plagued 2021 have continued into 2022.
Technological upheavals continue to reshape industries, and issues of climate change and cybersecurity will be at the center of concerns this year. Geopolitical tensions are also mounting, now that countries have acclimated to the immediate challenges posed by the pandemic.
In short, no one expects 2022 to unfold without incident.
Trends that will shape 2022
Some of the predictions above are straightforward. GDP targets and explicit binary statements don’t require too much explanation.
Below are some of the predictions that the experts have agreed upon that are worth exploring:
1. Geopolitical tensions will intensify
There are a number of potential hotspots around the world, but here are a few that experts are watching in 2022.
Iran: Tensions escalated between the United States and Iran after an attack on a US military base in southern Syria in the fall of 2021. In addition, tension between Iran and Israel could escalate further. in 2022, drawing other nations in the region into conflict.
Ukraine: It is about the continuation of the tensions which erupted after the annexation of Crimea by Russia in 2014. Europe’s dependence on Russian gas and Ukraine’s position as a plate gas transit turnaround make this a situation that experts are watching very closely.
Taiwan: The risk of China stepping into Taiwan has risen in experts’ minds, although the actions may contain “more barks than bites.”
2. China’s difficult start until 2022
Heading into 2021, many forecasts around China were largely optimistic as the country had entered a recovery phase earlier than the rest of the world.
Fast forward to 2022, and the forecast is opposite as China faces challenges on multiple fronts. For starters, there is pessimism surrounding China’s zero COVID strategy, which still sees entire cities fall under strict lockdown orders today. This strategy has inevitable economic impacts.
Second, uncertainty surrounding power shortages, a potential housing crisis, and regulatory crackdowns have dampened enthusiasm for the country’s near-term prospects.
Finally, Xi Jinping removed term limits for the presidency in 2018, potentially positioning himself to lead China indefinitely. As the 20th National Congress of the Communist Party of China approaches later in the year, if the country is still on uncertain grounds, it could create a tense political atmosphere in Beijing.
3. The year of the worker
The dynamics of work have remained in the spotlight since the pandemic shook the world of work. There are a number of trends that emerge from this larger theme:
- The labor shortages that arose during the pandemic will remain in place into 2022 and beyond. Some sectors, like cybersecurity, face serious shortages of skilled labor
- There is a broad consensus that the future of office work is “hybrid”. Companies that do not offer flexibility will be at a disadvantage in attracting talent
- The internet and social media have opened up a number of career paths for individuals to earn income beyond just working for a business.
- Work / life balance and burnout will be central points in discussions around corporate culture.
4. The changing digital ecosystem
If the predictions are any indication, we’ll hear a lot more about NFT and Web3. There are a lot of opinions on the former, and they range from the rambunctious to the downright downright. Whether the hype surrounding NFT profile pictures fades away is a puzzle, but technology has opened the door to a lot of experimentation for artists and creators.
On that note, pundits are generally excited about the prospects of the burgeoning “creator economy,” a catch-all term describing the new tech ecosystem and growing infrastructure that allows individual content creators to monetize and sell. ‘flourish.
Another trend that’s gaining momentum is social media-centric e-commerce. The ability to buy products directly from influencers is increasingly common on major social platforms, and e-commerce companies are creating more products to support influencers in their marketing efforts.
By 2026, Gartner estimates that 60% of Millennials and Gen Z consumers will prefer to shop on social platforms over traditional digital commerce platforms.
5. Inflation is slowly easing
Concerns about inflation have always cropped up here and there, but in countries like the United States, truly damaging levels of inflation have not been seen since the 1980s.
Last year the rhetoric changed.
After billions of dollars in stimulus and pandemic borrowing, inflation was suddenly back on the radar – and it was not “transient” as early statements from the central bank hoped. Now, in 2022, experts expect above-normal inflation levels to hold.
While inflation is expected to have an impact going forward, experts are also seeing it stabilize (relative to 2021) as supply chain disruptions subside.
6. Another record year for electric vehicles
As climate change increasingly dominates the spotlight in 2022, regulatory measures will force automakers to think about the future of their fossil-fuel models.
Even as incentives are slowly being removed in a number of markets, sales of electric vehicles are expected to set new records this year. In addition, the electrification of fleets will be a growing trend.
Industrial and battery metals like lithium and cobalt jumped 477% and 208%, respectively, in 2021, a trend that many experts say will run until 2022.
Among the hundreds of sources we reviewed, here are a few that stood out as memorable and comprehensive:
- Bloomberg Outlook 2022: This article has compiled over 500 predictions from Wall Street banks and investment firms.
- All-in-one podcasts Predictions 2022: This lively podcast, featuring Chamath Palihapitiya, Jason Calacanis, David Sacks and David Friedberg, is always entertaining and informative. In this episode of predictions, the biggest winners and losers of companies is great, just like the best performing asset.
- Eurasia Group Main risks for 2022: This comprehensive group of articles covers a lot of ground and offers some very believable predictions of what could happen on the world stage this year.
- Mackenzie’s Wood Predictions for 2022: Wood Mackenzie analysts offer 10 forecasts for key developments expected in the energy and natural resources industries in 2022.
Finally, if you’ve found our Prediction Consensus useful, we’ll be digging deeper into this topic in the coming weeks.
Our VC + members have access to all Global Forecasts 2022 series, which features a webinar and additional articles that further flesh out the forecast for the coming year. You can learn more about it here.