China’s zero-COVID-19 policy may delay the restoration of the EM growth premium while we wait for an eventual end to the pandemic. Meanwhile, distressed property developers present a headwind to growth, though monetary stimulus is helping turn the tide some in China in the near term.

We expect developed international and U.S. economies to generate similar growth in 2022, though rising forecasts for Japan are encouraging. Europe may also see more benefit from pandemic-related pent-up demand as the region is earlier in its economic cycle than the U.S., and U.S. growth has gotten off to a slow start in the first quarter because of the Omicron variant.

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