Although 2020 threw the world into chaos and economic turmoil, 2021 could see many positive developments and trends take hold. In this article, we will look at some of the top economic trends that we are likely to see emerge and or grow stronger.
Online Boom
Let us get the obvious one out of the way. Online businesses are going to enjoy a boom for quite a while to come. This will provide plenty of opportunities and room for innovation and competition, all of which will ensure that the consumer emerges as the winner.
Growth in Global Trade
2021 will likely see significant growth in global trade as supply chains normalize and new opportunities emerge. Also, a more trade-friendly US administration, along with China now championing free trade for its own survival, could potentially work to accelerate this trend.
Increased Inflation
Governments around the world have been borrowing and spending money like there is no tomorrow to help battle the global pandemic. Such liberal increases in the money supply will likely lead to increased inflation over 2021.
Interest Rates May Rise
As unbelievable as it may seem, all the cash that is sloshing about in the global financial system will ultimately force central banks to increase interest rates in order to prevent economies from overheating or currencies from collapsing.
Drooping Dollar
The dollar’s days may be numbered. Russia is flush with foreign exchange and gold, the same with China and, while the US and the EU have been floundering about, Asia has been working towards liberalizing trade and driving economic growth. Thus, it is likely that we will soon see the decline of the dollar. While tales of overnight collapse are popular and make for excellent dinner party conversation thrills, the dollar is more likely headed the way of the pound sterling after the collapse of the British Empire.
A Commodities Boom & Stock Market Slump
As the world economy recovers, we will likely see increased demand for raw materials, food, energy, and precious metals. Along with this, we will probably see presently massively overbought stock markets going in for a correction. The recent chaos with GameStop and other “stonks” in the USA and globally will soon cause market shifts that will potentially spur much-needed corrections and reality checks in the world’s equity markets.
Innovation Creates New Breed of Entrepreneurs
The pandemic has created many problems to solve and put many in challenging economic circumstances. These are the drivers of innovation and we are likely to see a new breed of entrepreneurs emerge out of this crisis.
