In the context of a gap between American outperformance, the recovery in the euro zone and Asian growth penalised by the low average vaccination rate and the persistence of border restrictions, Mathilde Lemoine sees the trend decline to 5.2% in 2021 and to 4.9% in 2022. In detail, growth in the US should stand at 6.6% in 2021 and 4.6% in 2022. In Europe, it would be around 4% in 2021 and 4.9% in 2022, and in Asia 5.1% in 2021 and 5.8% in 2022.

For her, more homogeneous economic growth requires strong political commitment, especially within the G20, to achieve collective immunity. In the meantime, "the extent of the global recovery remains subject to the epidemic resurgence, which continues to weigh on trend growth prospects."

An increased risk of financial instability

How is sluggish and unequal growth a risk for the economy and investors? “Because the heterogeneities of recovery make the exit policies for monetary support decided in light of the pandemic disparate. This is the worst-case scenario for investors and governments which might therefore have to face financial instability, unless coordination is decided upon like it was after the financial crisis."

For Lemoine, the current paradigm shift of the Fed driven by the growth of the US economy is forcing other central banks to position themselves in relation to it. "Europeans are losing the monetary autonomy that the overall coordination of monetary policy guidelines gave them," she said. "This is dangerous in a context where the economic situation in the euro zone is based on public and private investment and therefore on the ability of the European Central Bank to maintain accommodating credit conditions for SMEs.”

She adds, "Faced with these divergences, only the strengthening of global coordination would be likely to limit volatility and the increase in risk premium.”

This article was originally published in French on Paperjam and has been translated and edited for Delano.