The impact of omicron on global economy in 2022

The coronavirus outbreak has effected the functioning of the economies globally. The perspective of the whole world has changed, marking the beginning of a new world order.Covid-19 has hit all of us alike.. Perhaps, this was a lesson from the Mother Nature who made us rethink about the things we had taken for granted. The pandemic has made us redefine our lives and the way we interact with each other.

As we are stepping into a new year, the economies are still concerned with the new variant and its impact globally. The reports have suggested that Omicron cases will reach its peak during February 2022. With this, the optimistic hope of economic recovery is in the blue, pushing policy makers to focus on inflation rather than weak demand.

The imposition of travel restrictions shakes consumer and corporate confidence, limiting activities in some places. Nations across Europe have re-imposed tougher measures to stem the new wave of COVID-19 infections with the Netherlands leading the way by imposing a nationwide lockdown. Japan has also decided to ban the entry of all foreign visitors as part of its plan to curb the spread of the new variant.

The domestic equity markets were in a freefall right from the start of trading this week. The rapidly spreading variant is became a concerning factor for the investors. Most countries in Europe have geared up to control the rising number of infections. The expectations for the increase in interest-rates over the coming year has dropped by at least 10 basis points for the central banks of the US, U.K and Australia.

The scientists are still studying the effectiveness of the vaccine and how resistant it is to the new variant. Even though WHO has stated that the new variant is less-dangerous than the Delta variant, its impact on the economies is yet to be found, as it spreads faster. However, India can be spared from a crippling lockdown next year as the vaccination drive in the country is on track. According to MoHFW, the total number of vaccination has reached 1,37,67,20,359 in India.

Experts from the Goldman Sachs Group Inc. have said that there are four possibilities which include a downside scenario where a large infection wave in the first quarter of the next year will slow down the global economic growth by 2 per cent. The overall growth in 2022 would be 4.2 per cent, or 0.4 per cent points below forecast.

All of this is obviously a prediction, the future is unknowable but the pandemic increasingly looks like one of the defining events of the upcoming time. If the scientific advancements can help in defeating the virus this year, there may not be major changes in everyday life.