The omicron variant of the COVID-19 coronavirus, a new threat to the global recovery

Brutal victim of the pandemic, the convalescent world economy is already affected by the omicron variant of the coronavirus, which is accompanied by restrictive measures, especially in the air transport sector.

First reported less than a week ago to the World Health Organization (WHO) in South Africa, this new strain was detected from the Pacific to Europe, via Canada, prompting about 40 countries to announce new travel restrictions.

The severity of the economic impact will depend on the danger shown by this new variant, the vaccination coverage of the world population and the resistance of the strain to the available vaccines.

Reduced forecasts

However, from the most favorable scenario to the most gloomy assumptions, economists are already lowering all the forecasts for 2022.

The International Monetary Fund (IMF) has pointed out for months that COVID-19 continues to be the main risk factor for the world economy, and urges to accelerate vaccination. In October, I expected 4.9% growth for next year.

The economic impact could be “modesto“In the order of 0.25 percentage points over world growth if omicron causes”relatively mild symptoms“And vaccines are”effective”Stressed Gregory Daco, chief economist at Oxford Economics.

In the worst case scenario, where the variant becomes extremely lethal and forces a large part of the world population to be confined, the estimated growth for 2022 could be reduced to 2.3% against the 4.5% estimated by Oxford Economics prior to the appearance of this variant. .

Even in that scenario, it is not certain that governments that have poured billions of dollars in aid since the start of the pandemic are willing to take further fiscal stimulus measures, especially if vaccines are available, Daco noted.

“These aspects will be key to determine to what extent this will affect the world economy and people’s behavior”Stressed Erik Lundh, Conference Board economist.

Self-restriction and scarcity

Beyond the measures that governments take, the fear of infection could lead people to impose restrictions on traveling or going out to dinner, for example, reducing the risk of contagion, but also consumption, affecting growth, he added.

Another risk is the exacerbation of problems in global supply chains and inflationary pressures.

Because “a large part of air transport passes through flights carrying passengers”, Recruits Erik Lundh. “If there are flight cancellations, a disruption in the demand for commercial passenger flights, you run the risk of limiting air freight“, said.

Also, a wave of omicron infections “could cause some workers to temporarily leave the workforce and discourage others from returning, exacerbating the current labor shortageNeil Shearing, chief economist at Capital Economics, commented in a note.

However, US President Joe Biden said Monday that “there is no reason to panic,” even if the country was put on “early warning”.

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

Interest rates

However, the threat of a new, potentially more serious variant will complicate the task for central banks, which could “postpone your plans to raise interest rates until the situation is clearer”Shearing pointed out.

The Federal Reserve (Fed) will meet on December 15, and several others, including the European Central Bank (ECB) and the Bank of England, the following day.

“We will know most of what there is to know (about omicron) in a few weeks“Pfizer CEO Albert Bourla said on US network CNBC on Monday.

In the meantime, “uncertainty is detrimental”Says Gregory Daco.

“Every time the climate of uncertainty and fear returns, the recovery of the world economy slows down”.

On Monday, Fed Chairman Jerome Powell himself warned that omicron is a risk to the US economy, one of the engines along with China and Europe of global activity.