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Directors’ report

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The world around us

Key developments


The year 2021 was marked by recovery, after the outbreak of Covid-19 in 2020 had triggered severe economic contraction on a global scale. The Dutch economy recorded growth of 4.5% in 2021. Together with Sweden, the Netherlands was among the few European countries where the economy had returned to pre-pandemic levels by the end of 2021. While Italy, France and the United Kingdom saw their economies grow at rates above 6%, the contraction in 2020 had also been more severe in these countries. Nor could the recovery seen in Germany and Spain in 2021 fully make up for the contraction of their economies in 2020.

In Asia, almost all countries important to Bouwinvest recovered from the 2020 economic downturn and finished above pre-crisis levels. However, Japan lagged behind with a marginal rebound of less than 2% after a 4.7% decline in 2020. The United States saw a solid recovery from the Covid-19 crisis and, together with China and Australia, proved to be among the best performing and most resilient of the world’s economies.

From the second half of last year, global real estate markets have been dominated by problems at Chinese real estate developer Evergrande. Evergrande is the country's second-largest real estate developer and is burdened with some € 300 billion of debt. The impending bankruptcy of the company dented confidence in other developers both in China and beyond. Although the Chinese government has taken steps to stem the tide, the concerns and risks of the knock-on effects of this crisis have not gone away. This is expected to put pressure on economic growth in China.

Unemployment in the United States came in at 3.9% in 2021. The average unemployment rate in the Eurozone was 7.2% at the end of last year, but there are major differences between the various member states. In the Netherlands, for example, only 2.7% of the working population was unemployed, while in Spain the figure stood at 14.2% at the end of December. In Asia and the Pacific, unemployment is relatively low, fluctuating between 2.7% in Singapore and 5.25% in Australia at the end of last year. Thanks to the financial support provided by various governments during the crisis, unemployment and the number of bankruptcies have remained relatively low. This may change when the support measures are ended after the pandemic, but many countries are not expected to withdraw their support completely until their economies are back on a stable growth path.

The second half of last year was marked by a sharp rise in prices. Demand for materials far exceeded supply, resulting in global shortages. The Covid-19 pandemic disrupted logistics markets, triggering a sharp rise in transport costs. On top of this, an energy crisis followed in the latter part of last year, with gas prices increasing fivefold in a short period of time. Global inflation rates ranged between 4% and 5% at the end of 2021, more than double previous levels.

Concerns about sustained high inflation are putting downward pressure on economic growth expectations. We appear to be closer to interest rate hikes to curb inflation. Several central banks had already raised policy rates at the end of 2021, or announced that they would do so in 2022. In mid-March, the US Federal Reserve and the Bank of England raised interest rates by 0.25 percentage points, in an attempt to stem soaring inflation rates. The ECB have so far remained silent on interest rates, although, like the Federal Reserve, the bank has announced it will scale back its bond-buying programme. Below you will find the economic growth forecast. This forecast is from December 2021 and does not include the economic impact of the war in Ukraine.

Economic growth forecasts















United States










The Netherlands





Source: Oxford Economics (22 December 2021)

Geo-political developments

Under new US President Joe Biden, the United States has re-joined the Paris Climate Agreement. In addition, the country has restored its relationship with the World Trade Organization (WTO) and the World Health Organisation (WHO) and reaffirmed the importance of NATO. Economically, the United States and Europe have strengthened ties, in part to form a bloc against fast-growing China. On the domestic front, President Joe Biden is boosting the US economy via major investments in infrastructure.

Although economic growth in Asia is relatively stable, the region remains in the grip of the pandemic. China is implementing strict policies to contain the Covid-19 virus. The regular and complete closure of major Chinese cities and ports last year once again jeopardised the recovery of international goods traffic and the supply of materials. Since the end of last year, the global shortage of semiconductor chips has led to cutbacks in the production of cars and other products that rely on chip technology. These problems have continued into 2022.

The biggest crisis, however, is the war in Ukraine, following Russia’s invasion of the country in early 2022. The Russian invasion of Ukraine and the rapidly escalating events in late February and into March 2022 are a very tragic development for the people of Ukraine and these disrupted business and economic activities in the region and globally. These events and resulting economic uncertainties may have a negative impact on Bouwinvest, including on the valuation of its holdings and/or cash flows. At this time, it is not possible to estimate the financial impact of this crisis, either globally or for Bouwinvest. Bouwinvest regularly screens its business associates, including against sanctions lists. Recent checks against sanctions lists, specifically with respect to Russia and Belarus, have not resulted in the identification of any violations of these sanctions. Also, there are no other material consequences that impact Bouwinvest’s ability to continue as a going concern. Bouwinvest will continue to monitor developments and evaluate any possible consequences for the organisation.

Demographic developments

The world population will grow to almost 10 billion people in the coming 30 years. However, growth is declining, from some 1% to 2% a year to 0.5% a year. This is mainly due to declining birth rates and the increased ageing of populations. Just nine countries will account for more than half of future population growth. India will overtake China as the most populous country in the world within just a few years. While Africa is projected to have the highest growth rate, many developed countries are actually experiencing declining population numbers. The ageing of Europe's population is expected to peak in 2050. China will also have to deal with the ageing of its population.

The growth of the world population is driving increasing urbanisation in most regions. As a result, metropolitan regions worldwide are increasingly confronted with shortages of affordable housing. It is estimated that 84% of the European population will be living in metropolitan areas by 2050. To meet the growing demand for housing in the Netherlands, the country needs to build about one million new homes, mostly in urbanised regions.

The pandemic has also increased inequality in the world. The outlook is especially grim for less-skilled workers. Globally, 65 to 75 million more people have fallen into poverty since the outbreak of the Covid-19 pandemic. The United States, for one, is certainly expected to see a further increase in economic inequality; the middle class is shrinking in the US.


Many countries are actively switching to carbon-neutral, environment-friendly economies. In Europe in particular, there is a growing urgency to reduce energy consumption and switch to renewable energy, increase biodiversity, reduce resource use and transition to a circular economy.

As one of the world's biggest polluters, China is lagging behind developed countries in terms of sustainability. The country is still heavily dependent on fossil fuels, but is taking steps on this front. In November of last year, China and the US signed an agreement in which they promise to reduce their CO₂ emissions to such an extent that they will be able to meet the climate targets of the Paris Agreement.