Top ten economic stories of 2021
Back in the spring of 2020, there was serious talk about the pandemic causing a decade-long global economic slump akin to the Great Depression of the 1930s
By Rob Roach, ATB Economics 17 December 2021 3 min read
Today’s Owl reviews 10 of the biggest economic stories of the past year (in reverse order à la the old Late Night with David Letterman show).
10. The energy crisis in Europe - From a lack of wind to Russian machinations, a cocktail of factors pushed European natural gas and electricity prices to record highs and has many people worried about whether they will be able to stay warm over the winter.
9. Supply chain problems part 1 - In March, the Suez Canal was blocked for six days after the grounding of a container ship called “Ever Given.” About the same size as the Empire State Building, images of the giant ship wedged across the width of the canal had us wondering “is that all it takes to disrupt the flow of global trade?”
8. Supply chain problems part 2 - The whispers of supply chain disruptions brought on by the faster-than-expected global recovery, pandemic shut-downs and transportation bottlenecks turned into loud shouts as we got deeper into the year. Who knew that a shortage of semiconductor chips would, for example, hamstring vehicle sales?
7. Supply chain problems part 3 - Among the many negative effects of the once-in-a-century flooding in BC that began in November was a major disruption of the movement of goods to and from the West Coast and was another reminder of the importance of trade, supply chains and transportation infrastructure.
6. China - From the release of Michael Spavor and Michael Kovrig and the announcement of a diplomatic boycott of the Winter Olympics in Beijing to the Evergrande debt crisis (not to be confused with the Ever Given container ship owned by the Evergreen Marine Corp discussed above) and an economic slowdown in the third quarter, China continued to shake up both global affairs and the global economy.
5. Inflation - It’s not the double-digit price increases we saw in the early 1980s, but inflation has busted out of its “target range” of 1-3% and has experts and policymakers (not to mention anxious consumers) wondering how long it will be before the beast is back in its cage.
4. Oil prices - Strong oil prices (the average price of a barrel of West Texas Intermediate crude has averaged $67.87 (US) so far this year compared to $39.50 in 2020) have helped Alberta’s economy recover. They have also led President Biden to suggest almost everything except building more pipelines from Alberta to the U.S. as a solution to high prices at the pumps. (Admittedly, reversing the cancellation of the Keystone XL pipeline project would do little to address prices in the short-term, but it would be one way to help ensure the U.S. has the oil it needs at a reasonable price over the long-term).
3. Drought - Drought conditions here in Alberta and in other places reduced crop yields and pushed up food prices.
2. The global recovery - Back in the spring of 2020, there was serious talk about the pandemic causing a decade-long global economic slump akin to the Great Depression of the 1930s. Instead, policymakers, businesses, scientists, health care workers and other groups and individuals found ways to mitigate the deleterious effects of the pandemic and, despite many bumps along the way, spur a global recovery.
This points to the biggest economic story of 2021:
1. Vaccines - The main reason the dire economic forecasts that characterized the early days of the pandemic have not come to pass (not to mention even greater loss of life) is the rapid development and deployment of effective vaccines. What seemed like a long-shot during the first round of lockdowns became a reality with vaccines now widely available (at least in wealthy countries).
Answer to the previous trivia question: According to the song “You’re a Mean One, Mr. Grinch,” the Grinch’s heart is full of unwashed socks!
Today’s trivia question: The trivia questions will return in 2022.