Omicron variant raises new fears for pandemic-hit world economy

Asia's Tech News Daily

Omicron variant raises new fears for pandemic-hit world economy
© Philip FONG A woman looks on from the observation deck of Tokyo’s Haneda international airport on November 29, 2021, as Japan announced plans to bar all new foreign travellers over the Omicron variant of Covid-19

Just as it was recovering from the body blow of the Covid-19 pandemic, the global economy has taken yet another hit from the Omicron variant of the virus, which has led to a raft of new travel restrictions.

First reported to the World Health Organization in South Africa less than a week ago, the new strain has rapidly spread everywhere from Africa to the Pacific, and from Europe to Canada, causing dozens of countries to announce travel restrictions. 

The severity of the economic impact will depend on how dangerous the variant proves to be, and how well existing vaccinations stand up to it.

That has meant that even with the most favorable scenarios in mind, economists are already revising their 2022 forecasts downwards.

The International Monetary Fund, which expects growth of 4.9 percent for the next year, has been insisting for months that the coronavirus and its variants remain the main threat.

The economic impact could be “modest,” in the order of 0.25 percentage points on global growth in 2022, if Omicron causes “relatively mild symptoms” and the vaccines are “effective,” said Gregory Daco, chief economist at Oxford Economics. 

In the worst-case scenario, in which Omicron proves extremely dangerous and large swaths of the world are in lockdown again, 2022 growth could fall to around 2.3 percent, as compared to the 4.5 percent expected by Oxford Economics before the variant emerged. 

And in such a scenario it is not certain that governments, which have stumped up trillions of dollars in aid since the start of the pandemic, would be willing to put in place further fiscal stimulus packages, especially if vaccines are available, Daco said.

Those aspects “are going to be really key to how it affects the global economy and people’s behavior,” said Erik Lundh, an economist at The Conference Board.

– Self-isolation –

Beyond government measures to contain the new strain, fear of infection could lead people to limit their own travel and economic activities, such as going to restaurants and reducing consumption, which will in turn impact growth, Lundh said. 

Another risk is the exacerbation of the global supply chain crunch. Lundh pointed out that “a lot of air cargo is stored basically in the belly of passenger planes…It’s not just all sorts of FedEx planes.”

“So if there are cancellations, if there’s a lapse in demand for commercial flights for passengers, it does run the risk of limiting the route of trade,” which could in turn worsen inflationary pressures as goods become more scarce.

In addition, a wave of Omicron infections “could cause some workers to temporarily exit the workforce, and deter others from returning, making current labor shortages worse,” said Neil Shearing, chief economist at Capital Economics in a note. 

Omicron has sparked more anxiety than any other variant since the emergence of Delta, itself already much more contagious than previous strains. 

US President Joe Biden, however, said Monday that there was “not a cause for panic,” even if the United States has closed its borders to travelers from the southern African region where the variant was first detected. 

As for vaccine manufacturers AstraZeneca, Pfizer/BioNTech, Moderna and Novavax have expressed confidence in their ability to combat the variant.

– Interest rate hike delayed? –

However, the threat of a potentially more serious variant will complicate the task of central banks which could “postpone plans to raise interest rates until the picture becomes clearer,” said Shearing. 

The Federal Reserve is due to meet on December 15, with several others, including the European Central Bank (ECB) and the Bank of England meeting the day after.

Pfizer CEO said Albert Bourla said it will be a few weeks before drug makers know most of what they need to know about the new strain.

In the meantime, “uncertainty is damaging,” said economist Daco. 

“Every time you come back to a climate of uncertainty and fear, it slows down the recovery of the world economy.” 

On Monday, Fed Chairman Jerome Powell himself warned that Omicron is a risk for the US economy, which together with China and the European Union is one of the engines driving the global economy.

dt/jh/bfm

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

This Plant-Based Diet Still Lets You Have Meat

The flexitarian diet is ahead of its time. The concept became popular after Dawn Jackson Blatner, R.D., published The Flexitarian Diet in 2008, and is essentially an outline of the ... Read more »

Justices Gorsuch and Sotomayor seek to play down mask row – but without addressing accusation

© Getty Images GettyImages-1232480839.jpg Supreme Court Justices Neil Gorsuch and Sonya Sotomayor are pushing back on reports of conflict between the justices over Mr Gorsuch’s refusal to wear a mask ... Read more »

Hilary Duff Didn't Know Cadet Kelly Resonated with LGBTQ Community: 'If It Helped Anybody, I Hope So'

© Provided by People Buena Vista/Kobal/Shutterstock Christy Carlson Romano and Hilary Duff in Cadet Kelly Hilary Duff is looking back at her film Cadet Kelly with new eyes. The How ... Read more »

Plans to tackle NHS waiting lists in Wales ‘will be delayed until spring'

© PA Archive Pioneering gene-silencing drug Plans to reduce NHS waiting lists in Wales will likely be delayed until the spring, health minister Eluned Morgan has warned. Baroness Morgan indicated ... Read more »

Maguire on bench for Man Utd vs Brentford

© PA Harry Maguire will be on the bench for Man United’s game with Brentford Harry Maguire will be named on the bench again for Manchester United’s Premier League clash ... Read more »

GM expands market for hydrogen fuel cells beyond vehicles

The Associated PressThis image provided by General Motors shows the GM Logo. General Motors is finding new markets for its hydrogen fuel cell systems. The automaker announced Wednesday, Jan. 19, ... Read more »

HBO leads GLAAD Media Awards for LGBTQ representation

The Associated PressThis image provided by Jeopardy Productions, Inc. shows game show champion Amy Schneider on the set of “Jeopardy!” Schneider is the first trans person to qualify for the ... Read more »

Djokovic has 80% stake in biotech firm developing Covid drug

© Provided by The Guardian Photograph: Darko Bandić/AP Tennis star Novak Djokovic is the controlling shareholder in a Danish biotech firm aiming to develop a treatment for Covid-19 that doesn’t ... Read more »

London's 'sickest ever' Covid patient who spent nearly a year in hospital only just able to walk again

A man described as ‘London sickest ever’ Covid patient has only just stopped using oxygen support and learnt to walk again after falling ill on Christmas Day 2020. Andrew Watts, ... Read more »

German Green party leaders face probe over bonus payments

BERLIN — Berlin prosecutors have opened an investigation into the leadership of Germany’s Green party, including the new vice chancellor and foreign minister, over pandemic bonus payments last winter. Prosecutors ... Read more »

Florida man gets 5 years for COVID-19 relief, tax fraud

On Location: January 19, 2022 Catch up on the developing stories making headlines.ABCNews.com ORLANDO, Fla. — A Florida man convicted of fraudulently collecting more than $1.3 million in COVID-19 relief ... Read more »

Unilever won't top $68B bid for GSK consumer healthcare unit

The Associated PressFILE – The offices of pharmaceutical firm GlaxoSmithKline, in London, April 20, 2009. The pharmaceutical giant GlaxoSmithKline said Saturday Jan. 15, 2022, it has rejected an unsolicited 50 ... Read more »

NHS worker given suspended sentence for fatally driving into 'amazing mother, wife and nanny' in South London

An NHS nurse appeared in court after he killed an 85-year-old woman on his driveway after failing to notice she was standing behind him. Asgar Mulla had reversed against oncoming ... Read more »

Boris Johnson determined to fight any no confidence vote and next election

Boris Johnson will fight any no confidence vote launched against him by his own MPs and expects to fight the next general election, No 10 has said, after he was ... Read more »

Cardi B offers to pay funeral costs for Bronx fire victims

© Amy Harris/Invision/AP Cardi B Rapper Cardi B has offered to pay the funeral costs for all 17 people who died from smoke inhalation in a high-rise apartment building fire ... Read more »

Luke Bryan's 150-acre family home in Nashville has an emotional backstory

Luke Bryan has an incredible property portfolio, with his main home located in Music City, aka Nashville, Tennessee. MORE: Luke Bryan’s children star in emotional new video The American Idol ... Read more »

ITV News: Tom Bradby's life off camera from being friends with Prince William and Harry to quiet home life with wife and three children

“They’re laughing at us” were ITV News presenter Tom Bradby’s opening words as the story of a lockdown busting Downing Street Christmas party began to unravel. The Prime Minister’s spokesperson ... Read more »

Tory MP says sorry a second time after 'undermining' apology for bullying staff

A Tory MP has issued a second apology for “undermining” the first apology he gave for bullying Commons staff. Daniel Kawczynski faces being suspended for a day over remarks he ... Read more »

NYPD officer, 47, dies of COVID complications in Staten Island: police

It’s with great sadness we announce the passing of Police Officer Daniel Sanchez. Daniel was a 15-year veteran most recently assigned to @NYPDHighway. We pray that memories of Daniel bring ... Read more »

Stacey Abrams: Voting rights legislation can be passed

© Provided by Associated Press FILE – Then-Georgia gubernatorial Democratic candidate Stacey Abrams speaks during an interview with The Associated Press on Dec. 16, 2021, in Decatur, Ga. Stacey Abrams ... Read more »

9-1-1's Oliver Stark shares behind-the-scenes picture as Jennifer Love Hewittt confirms return

Oliver Stark has confirmed the joyous news that Jennifer Love Hewitt has returned to 9-1-1, sharing a picture of their on-set director’s chairs next to each other. “Siblings reunited,” he ... Read more »

Japan's prime minister laid out an ambitious economic plan that could usher in 'a new form of capitalism' and boost a 'shrinking middle class'

© Provided by Business Insider Japan’s Prime Minister Fumio Kishida at 2021 press conference Getty Images Japanese Prime Minister Kishida Fumio called for a new form of liberal democratic capitalism. ... Read more »

WH Smith hit by shareholder rebellion over bonus

© Provided by The Guardian Photograph: May James/Reuters WH Smith has been hit by a massive shareholder rebellion, with more than half its investors failing to back payment of a ... Read more »

Sotomayor, Gorsuch deny report they were at odds over masks

© Provided by Associated Press FILE – Associate Justice Sonia Sotomayor, left, and Associate Justice Neil Gorsuch, gather with other justices of the U.S. Supreme Court for an official group ... Read more »

Around 30% of the bitcoin in circulation is worth less than what holders paid for it, Glassnode has found

© Yuichiro Chino Blue bitcoin Yuichiro Chino About 5.7 million bitcoins in circulation, or 30%, are underwater, Glassnode said this week. Twice when the demand for bitcoin was this low ... Read more »

How to Find the Cheapest Gas Station Near You

Fuel prices are on the rise across Canada, and unfortunately, there’s no sign of a slowdown ahead. In fact, the price of gas is projected to hit $2 per litre ... Read more »

Center for COVID Control and its lab 'fraudulently reported negative test results,' Minnesota lawsuit says

CHICAGO — The Minnesota Attorney General’s Office filed a consumer-protection lawsuit Wednesday against a nationwide chain of coronavirus testing sites for “deceptive practices.” The suit alleges the Center for COVID ... Read more »

Bank of America profits rise 28% as labor costs surge

Bank of America saw most of its businesses grow profits in the fourth quarter. Getty Images Bank of America said its profits rose 28% last quarter from a year earlier, ... Read more »

Bobby Flay sells delicious Chelsea Mercantile spread for $5.6M

Home cookin’: Chef Bobby Flay just offloaded his Chelsea home. Gabe Ginsberg/Getty Images; Douglas Elliman Bobby Flay has finally sold his Chelsea spread for $5.6 million, according to city property ... Read more »

Hana Horka: Czech singer dies aged 57 after deliberately contracting Covid

Czech folk singer Hana Horka has died after intentionally catching Covid. Horka, 57, had not been vaccinated, and her son, Jan Rek, said she got infected deliberately when he and ... Read more »

Portsmouth plotting transfer swoop for Sunderland player

© Provided by Football League World Denver Hume Portsmouth are interested in signing Denver Hume from Sunderland before the transfer deadline shuts. The future of the left-back was uncertain over ... Read more »

U.K. shares higher at close of trade; Investing.com United Kingdom 100 up 2.75%

© Reuters U.K. shares higher at close of trade; Investing.com United Kingdom 100 up 2.75% Investing.com – U.K. equities were higher at the close on Wednesday, as gains in the ... Read more »

I'm disabled & stuck living on my mum's sofa… but the council say it could be SEVEN YEARS until I get my own place

A DISABLED woman has told how she is stuck living on her mum’s sofa after the council told her it could be SEVEN YEARS before she gets her own place. ... Read more »

Rapper Cardi B to pay funeral expenses for victims of the Bronx fire

Cardi B will pay the funeral expenses for victims of the deadly Bronx fire, the New York City Mayor’s office announced Wednesday. Seventeen people, including eight children, were killed after ... Read more »

Trudeau says Russia looking for ‘excuses' to invade Ukraine

Prime Minister Justin Trudeau is accusing Russia of looking for “excuses” to ramp up hostilities against Ukraine as NATO allies make another diplomatic push to avoid armed conflict. Speaking to ... Read more »

Love Island's Jake Cornish now gives aerobics classes in Somerset after swapping fame for dance workouts

LOVE Island star Jake Cornish is giving high-energy dance exercise classes in Somerset, he revealed today. The 24-year-old star was on track to win the series last year but split ... Read more »

Teen killer to be sentenced in stabbing death of Barnard student Tessa Majors

Tessa Majors was murdered on Dec. 11, 2019. The teen who murdered Barnard College student Tessa Majors will be sentenced Wednesday — bringing to a close a case that rattled ... Read more »

'Really unfortunate', 'Two to four weeks' - Expert reacts after Celtic hit with injury woes

Injury expert Ben Dinnery believes Celtic forward Kyogo Furuhashi could be out for four weeks with his current muscle problem, Football Insider report. © Provided by Transfer Tavern 2021-12-19T165247Z_48364283_UP1EHCJ1AVYKT_RTRMADP_3_SOCCER-SCOTLAND-HIB-CEL-REPORT The ... Read more »

First contacts made: 'Special' £50m-rated forward now a 'priority' signing for Newcastle

Darwin Nunez is reportedly now the ‘priority’ signing for Newcastle United in the January transfer window. © Provided by Transfer Tavern Primeira Liga – Belenenses v Benfica The Lowdown: Another ... Read more »

I was fined £400 for leaving my rubbish in a box as the council didn't give me a bin – now a stranger has paid the fine

A SINGLE mum fined for leaving her rubbish in a box after the council didn't give her a bin – now a stranger has paid the fine. Chloe Rhodes, 23, ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic