Credit Suisse Investment Outlook 2022: Economic Growth to Stay Above Trend
26th November 2021 | Hong Kong
Credit Suisse has released the Investment Outlook for 2022, with economic growth in 2022 to stay above trend. According to the Credit Suisse Investment Outlook 2022, the global economy is expected to grow by 4.3%. Although several central banks have started to withdraw pandemic stimulus, interest rates are set to remain at or near zero in the major developed economies. Against this backdrop, equity returns should remain attractive, though they are likely to be more moderate than last year. View: Credit Suisse Investment Outlook 2022
“ Credit Suisse Investment Outlook 2022: Economic Growth to Stay Above Trend “
Credit Suisse Investment Outlook 2022
The global economy looks to remain on a solid path in 2022, driven by robust demand, still supportive fiscal and monetary policy and the relaxation of COVID-19 related restrictions. Against this backdrop, we expect equities to deliver attractive single-digit returns for investors, supported by earnings. Beyond the shift to a post-pandemic normal, we believe 2022 will see the start of a great transition to a world in which sustainability plays an ever-increasing role for consumers, businesses, governments and regulators. In this context, we expect environmental, social and governance trends to remain focal and investors to continue including sustainability considerations when allocating capital.
Outlook for the major economies and currencies:
United States. Credit Suisse expects the USA to post real GDP growth of 3.8% in 2022, with a halting services rebound and ongoing supply chain problems complicating the final stages of the pandemic recovery. Inflation is expected to slow to 3.9% after an extreme spike in 2021. We expect the USD to benefit from a rate advantage over other developed market currencies as the Federal Reserve withdraws pandemic stimulus.
Eurozone. The Eurozone is expected to grow by 4.2% in 2022, as the economy eventually overcomes ongoing supply chain issues that have led to a sharp rise in inflation. The European Central Bank (ECB) should start paring back its asset purchase programs in 2022. We expect the EUR to start 2022 rather softly against the USD, but stabilize and recover later in the year, contingent on the ECB’s policy actions.
Switzerland. The Swiss economy should post solid growth in the coming months, while a decline in the unemployment rate should support consumer spending. We forecast Swiss GDP growth of 2.5% in 2022. As the Swiss National Bank is likely to continue to intervene in the FX market if needed, the CHF should not appreciate meaningfully against the EUR.
China. After a strong growth recovery, China’s experienced a renewed slowdown due to problems in its real estate sector and regulatory changes and policy reform, which we expect to continue into 2022, potentially weighing on growth. China’s economy is forecast to grow at 6.1% in 2022. We expect the CNY to hold stable or soften somewhat in the first half of 2022.
Japan. The Japanese economy is expected to grow by 1.7%, as the new government is likely to provide further stimulus to support the economic recovery. We forecast the JPY to depreciate against the USD in 2022.
Outlook for the main asset classes:
Equities are forecast to provide single-digit returns in 2022, more moderate than in 2021, while continuing to offer an attractive risk premium over bonds. Equity segments that lagged the pandemic recovery should emerge as bright spots, as should industries that benefit from secular growth trends.
In fixed income, government bond yields will likely deliver negative returns in 2022. In credit, low spreads in investment grade and high yield will barely compensate for the risks associated with higher yields. We favor Eurozone inflation-linked bonds and prefer senior loans.
Demand for commodities is set to remain supportive in 2022 given expectations for continued above-average global industrial production growth and restocking needs. The price of carbon will stay a key topic, while gold may be vulnerable as policy normalization begins.
In alternative investments, real estate should continue to benefit from the still low interest rate environment, as well as the continuing economic recovery. The economic backdrop also remains supportive for private markets, while hedge funds should deliver modest returns close to the historical average.
Michael Strobaek, Global Chief Investment Officer at Credit Suisse:
“In light of the continuing economic recovery, we expect equities to deliver appealing returns in 2022, warranting sufficient exposure to the asset class in portfolios. Given only meager expected returns in fixed income, investors should look to strategies that follow non-traditional patterns to diversify their opportunity set. Given the accentuating climate crisis, policy is bound to become more climate-focused. This is a development that investors must factor into their investment decisions.”
Nannette Hechler-Fayd’herbe, Chief Investment Officer International Wealth Management and Global Head of Economics & Research at Credit Suisse:
“The COVID-19 pandemic was an unprecedented shock to the global economy that led global policymakers and businesses into uncharted waters. It also heightened the relevance of thematic investments, which can help investors capture long-term trends that are ushering in change. In this context, our Supertrends framework remains highly relevant, as stakeholders commit to net zero.”
- Credit Suisse Private Bank Francois Monnet to Retire, Benjamin Cavalli Appointed Head of Wealth Management APAC
- Credit Suisse Private Bank Appoints Benjamin Cavalli as Head of Wealth Management APAC
- Credit Suisse Private Bank Appoints Jinyee Young as Deputy Head of Wealth Management Asia-Pacific
- Credit Suisse Appoints Chien Chien Wong as CEO Singapore, First Female CEO in Singapore
- Credit Suisse Appoints Sacha Eugster as Private Banking Market Leader for Philippines
- Credit Suisse Merges Global Wealth Management & Private Banking
- Credit Suisse Pays $475 Million Fines to US & UK Authorities to Resolve Charges for Africa Bond Offerings
- Credit Suisse Grows Thailand Private Banking Team with 3 New Hires, 2nd Largest Economy in Southeast Asia with $500 Billion GDP
- Credit Suisse Strengthens North Asia Private Banking Team, Appoints 5 New Team Leaders
- Credit Suisse Senior Appointments & New Hires for Investment Banking & Capital Markets in APAC, Christian Deiss as Head of M&A APAC
- Credit Suisse Appoints Head of Family Office Services APAC Thomas Ang as Head of Wealth Planning APAC
- Credit Suisse Strengthens Investment Team, Hires Matthew Peh as Team Head of Emerging Asia & UHNW Investment Consulting
- Credit Suisse Strengthens Investment Team, Chatkaew Groatong as Head of Private Funds & Russell Huang as Managed Solutions Specialist
- Credit Suisse Report: Archegos Family Office Had $120 Billion Total Exposure
- Credit Suisse Hires Stella Lau as Private Bank Market Leader for Greater China, Adds 5 Senior Private Bankers
- Credit Suisse Hires Nicole Dunn as Private Banking Team Leader in Australia, 1.8 Million HNWs in Australia
- Credit Suisse Appoints Shirley Law as Private Bank Market Leader for Singapore, 270000 HNWIs in Singapore
- Credit Suisse Appoints Joyce Low as Market Leader Malaysia, To Maintain Leading Position
- Credit Suisse Hires Malcolm Tay as Deputy Group Head & Market Leader for Indonesia, Accomplished Banker with Stellar Reputation
- Credit Suisse Private Bank Expands in Greater China, Appoints John Huang as New Greater China Market Leader
- Credit Suisse Private Bank Appoints Tammy Tan as Team Leader for Thailand & Vietnam
- Credit Suisse Appoints Alois Müller as Head of Private & Alternative Markets APAC, Target $7.8 Billion Assets Yearly
- Credit Suisse Appoints Lock Keng Cheong as Market Group Head Greater China, Adds 6 Private Bankers & Advisors
- Credit Suisse Appoints Dominique Boer as Market Group Head Singapore, Adds 7 Private Bankers & Advisors
- Credit Suisse, UBS, Nomura, MUFJ and Morgan Stanley Losses for Archegos Family Office Nears $10 Billion
- Credit Suisse Raises $1.92 Billion in Capital, $5.5 billion Losses from Archegos Family Office
- Credit Suisse and Nomura in $6 Billion Hit by Bill Hwang Archegos Family Office
- Credit Suisse Global Wealth Report 2021
- Credit Suisse Global Wealth Report 2020
Credit Suisse is one of the world’s leading financial services providers. Our strategy builds on Credit Suisse’s core strengths: its position as a leading wealth manager, its specialist investment banking capabilities and its strong presence in our home market of Switzerland. We seek to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. Credit Suisse employs approximately 49,950 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com
Caproasia.com | The leading financial website for financial professionals, professional investors and HNW investors. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Quicklinks: Caproasia Access | TFC | Caproasia | Jobs