Ratings: Omicron could hit global growth if it launches new wave of infections

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The Omicron variant of the coronavirus that causes Covid-19 could hurt global growth prospects but also push up prices, according to rating agencies Fitch Ratings and Moody’s.

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“The Omicron variant poses risks to global growth and inflation, especially because it came at a time of already tense supply chain, high inflation and labor market shortages,” said Elena Dagar, Moody’s Deputy CEO, in a statement. sent to Reuters. It is also likely to hit demand during the upcoming Christmas holiday travel season, he added.

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Fitch said in a statement that it was too early to include the impact of the Omicron variant in its economic growth forecasts and that more information should be provided on its transmissibility and severity.

“We currently believe that another major, simultaneous global downturn, such as the one seen in the first half of 2020, is highly unlikely, but rising inflation will complicate macroeconomic reactions if the new variant prevails,” he said.

Dagar pointed out that the experience gained with the previous variants shows that, even with some restrictions on international transport, the spread of Omicron may be difficult to contain. “If the new variant leads to a new wave of infections, the economies that will be hardest hit are those with lower vaccination rates, higher dependence on tourism and less opportunity to provide budgetary and monetary support to offset the impact of the new wave. “, he pointed out.

Source: AMPE

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Source From: Capital

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