After expanding by a robust 5.1% in 2021, the global economy is set for another year of above-potential recovery growth in 2022, according to The Conference Board’s report, “Global Economic Outlook 2022: From Pandemic Downturn to Growth Revival.”

Global GDP contracted by an unprecedented 3.3% in 2020 but recovered all of its losses by the first quarter 2021, according to the report. And by the end of 2022, 66 out of 77 key economies — representing 96% of global GDP — should be at or above pre-pandemic output levels, though labor market and income recovery will lag somewhat.

“The challenge for most businesses in the decade ahead will be to implement growth strategies based on innovation and efficiency gains during a period of renewed labor shortages and tightening of monetary policy by major central banks in response to substantial inflation risks, which will impact costs of accessing capital,” said Ataman Ozyildirim, senior director, economics, at The Conference Board. “Business need to focus on both tangible and intangible investments to drive sustainable growth strategies.”

The US is expected to lead the way among large mature economies, with growth averaging about 2.0% from 2022 to 2031. The report forecasts the US economy is on track to expand by 5.7% in 2021 and remain robust at 3.8% in 2022 before slowing to 3.0% in 2023. Growth-rate projections include catch-up potential in a variety of US industries such as in-person services and expanded government spending related to the $1 trillion infrastructure bill.

The report also notes that labor market stresses in the US will moderate but wage pressure will persist.

“As the threat of Covid-19 ebbs, more workers should return to the work force, but firms will continue to face stiff competition for talent,” it stated.