Aviva Investors expects a strong economic recovery in the second half of the year and into 2022

(London) Aviva Investors, the global asset management business of Aviva plc, expects a rapid and broad-based recovery from the COVID pandemic in the rest of 2021 and in 2022.

Global growth should exceed 7% this year and around 4.5% next, with risks assessed to be on the upside for both. The virus will remain with us for some time, but the worst disruption from lockdowns is over, vaccination efforts are well advanced, people and companies have adapted well, and policy support has remained in place.

Re-opening of economies has led to a sharp revival in demand and supply has struggled to keep up, leading to frictional bottlenecks that have resulted in the emergence of some inflationary pressures. Much of this is expected to be transitory, but underlying inflation will probably be a little higher than just before COVID struck.

Monetary policy is therefore expected to remain supportive throughout the rest of the year and next, with recent changes in approach to meeting their inflation objective allowing central banks to keep policy looser for longer. Emergency levels of fiscal support will be steadily withdrawn as economies re-open, but more activist government spending initiatives are set to increase, especially in the US, with the green and digital agendas likely to be key elements

Michael Grady, Head of Investment Strategy and Chief Economist at Aviva Investors, said:

“Our constructive view on a reflationary outlook, alongside ongoing policy support, leads us to prefer to be overweight equities, with a bias to the US and UK. This is balanced by an underweight in emerging markets which may face headwinds from higher US bond yields, weaker local currencies and tighter domestic monetary policy.

“We expect the growth and inflation outlook to put some upward pressure on long-term sovereign bond yields, with the Fed in the US sticking to its new average inflation targeting regime. As such, we prefer to be somewhat underweight duration, mainly through US treasuries.

“The upside from tighter credit spreads appears to be limited, given the narrowing already seen, so we prefer to be slightly underweight investment grade and neutral high yield. Overall, we have a neutral view on currencies.”

House View Q3

PDF 5.3 MB 24 pages

Aviva Investors expects a rapid and broad-based recovery from the COVID pandemic in the rest of 2021 and in 2022.

For more information contact:

A picture of Katie Ormrod

Katie Ormrod

Aviva Investors Media Relations

A picture of Steve Ainger

Steve Ainger

Head of Media Relations

Important information

The information and opinions contained in this document are for use by the financial press and media only. No reliance may be placed for any purpose on the information or opinions contained in this document nor should they be seen as advice. 

The press release is provided on the basis that Aviva Investors Global Services Limited is not causing the communication of a financial promotion under exemption of the Financial Promotion Order, as Aviva Investors Global Services Limited has no control over the way in which an article based on this press release is prepared and published by the financial press and media. 

Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (“Aviva Investors”) as at 14 July 2021. Unless stated otherwise any views, opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature.  The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. 

Issued by Aviva Investors Global Services Limited, registered in England No. 1151805.  Registered Office: St Helen's, 1 Undershaft, London, EC3P 3DQ   Authorised and regulated by the Financial Conduct Authority.

Aviva Investors

Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £366 billion in assets as at 31 December 2020.


For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/

Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.

Our vision is to earn our customers’ trust as the best place to save for the future, navigate retirement and insure what matters most to them. In 2019, we paid £33.2 billion in claims and benefits on behalf of our 33.4 million customers.

We will focus on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. Our International businesses in Europe and Asia will be managed for long-term shareholder value. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience.

Total group assets under management at Aviva group are £522 billion and our Solvency II capital surplus is £12.0 billion (HY20). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.

For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us

The Aviva newsroom at www.aviva.com/newsroom includes links to our image library, research reports and our news release archive. Sign up to get the latest news from Aviva by email.

You can follow us on Twitter

You can follow us on LinkedIn: www.linkedin.com/company/aviva-plc

For the latest corporate films from around our business, subscribe to our YouTube channel

We have a Globelynx system for broadcast interviews. Please contact the Press Officer noted above if you would like to make a booking.