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For 2021, analysts at Natixis expect a situation of stagflation (sluggish growth, inflation) and financial and real estate asset price bubbles in OECD countries.

Key quotes

“Although OECD growth will be higher than long-term growth in 2021 (1.5%), it will probably not be very strong (3.5% to 4%).”

“Inflation in OECD countries is likely to be quite high in 2021, because certain categories of employees will receive wage increases (health, retail, transport, security), because commodity prices will recover, but above all because productivity is going to decline.”

“The monetisation of public debt by central banks will give rise to a considerable amount of additional money created by central banks in 2020. The amount of this investable liquidity is such that there will be asset price bubbles, which will be larger than after the subprime crisis.”