Phil Castle, The Business Times

The United States will lead the way in what’s expected to be strong economic growth worldwide in 2022 and a rapid recovery in the aftermath of the COVID-19 pandemic.

“Despite the depth of the recession in the first half of 2020 — and the unexpected setbacks of the Delta variant in 2021 — the global economy has recovered rapidly from the pandemic shock compared to past recessions,” said Dana Peterson, chief economist of the Conference Board.

The member-driven think tank based in New York offered an overview of its latest global economic outlook during a virtual media briefing.

Peterson said gross domestic product, the broad measure of goods and services, is expected to grow an average of  2 percent in the U.S. between 2022 and 2031, leading the way among large and mature economies.

Worldwide, GDP is expected to grow 5.1 percent in 2021 and 3.9 percent in 2022. Growth likely will slow to an average of 2.5 percent between 2022 and 2026 and an average of 2.4 percent between 2027 and 2031.

By the end of 2022, 66 out of 77 key economies accounting for 96 percent of global GDP should be at or above pre-pandemic levels.

In the U.S., investments and innovations in technology will spur growth. Federal legislation funding infrastructure construction also will contribute to growth.

Downsides remain in the outlook, however, Peterson said. They include labor shortages, inflation, climate change and the potential for financial instability.

Acute labor shortages continue to affect the United States as well as the United Kingdom and parts of Europe with no short-term solutions in sight, Peterson said.

Gad Levanon, head of the Conference Board Labor Markets Institute, said shortages persist despite rapidly rising wages as well as the automation of some services. 

Older workers have retired at higher rates than expected, while younger workers have become more selective in choosing where they’ll work, Levanon said.

Asked if the extent of inflation has been underestimated, Peterson said, “Probably yes.” Some inflationary pressures likely will remain more enduring.