Global markets
Equity markets continue to reach new highs. “Goldilocks” conditions of highly stimulative central bank policy and strong economic growth – driven by pent-up demand and gradually rising corporate profits – give markets little reason to be troubled over the spike in inflation. Strong economic growth should translate to strong revenue gains and significant corporate profit growth as long as profit margins can be sustained.
Canada
A successful vaccination program is making a positive impact on forward-looking economic data. Underpinned by ample government fiscal and monetary stimulus, employment is rising as reopenings gather steam and growth is picking up sharply as Canadians release pent-up demand and savings. While inflation remains a concern, with supply bottlenecks and renewed demand pushing up prices, the effects are expected to be transitory.
United States
Now largely free of pandemic restrictions, the U.S. continues to post strong economic results. Employment is picking up sharply, but millions still remain unemployed as government support winds down. While inflation is rising, the outlook suggests that the effects will be temporary. Federal infrastructure spending should boost the economy over the coming months, while monetary policy should help to keep interest rates low and encourage borrowing.
Europe
Economic indicators have begun to strengthen, and with travel restrictions gradually lifting, and many countries’ vaccination programs meeting with success, the outlook has brightened considerably. While 2021 growth is likely to lag that of North America, projections show a relatively higher growth outlook for the region into 2022, as it benefits from a sustained pick-up in tourism and exports.
Emerging markets
The economic growth trajectory for EMs is similar to that of developed nations, with a year of rapid growth, followed by some deceleration in 2022. Despite recent pandemic challenges, India is poised for structurally strong growth over the coming decades. China continues to benefit from being the first large global economy out of lockdown, with GDP up 18.3% in April from a year earlier, and full-year GDP growth forecast at 8.8%.
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