Omicron’s impact on the global economy
Mr. Gaby Jones told the New York Times Could a highly contagious omicron variant have a severe impact on the global economic recovery? Or will its mild symptoms prevent the economy from collapsing once?
After limping its way back from the COVID-19 pandemic last year, the global economic recovery has been rattled by the omicron variant’s rapid rise.
The travel industry has been thrown into disarray again, workers have been forced to isolate at home and governments are facing a stark choice between imposing restrictions or letting the economy be.
Could the highly contagious omicron variant have a severe impact on the recovery? Or will its mild symptoms keep the economy from sinking again?
How bad a hit on growth?
The head of the Monetary Fund, Kristalina Georgieva, International warned last month that global economic growth forecasts may have to be slashed following the emergence of omicron.
The IMF has previously banked on growth of 5.9% for 2021 and 4.9% this year, but it could now revise its estimates later this month.
To soften the blow on the economy, U.S. health authorities have cut the isolation period for asymptomatic cases by half to five days.
Mark Zandi, chief economist at Moody’s, said he expects U.S. growth of 2.2% in the first quarter, more than half lower than a previous estimate of 5.2%.
“Omicron is already doing economic damage, as is clear from weaker credit card spending, a decline in restaurant bookings, air flight cancellations, and many schools going back to online learning,” Zandi said.
“However, I do expect omicron to pass through quickly and for growth to rebound in the second quarter, and growth for the year to be unaffected,” he added.
Cancellations, cruises to be forced to dock and fewer hotel bookings.