Representational Pic At a time when the global economy was showing signs of recovery with economic supply chains beginning to unlock, the emergence of a new variant of the coronavirus, Omicron, has raised new fears more on the economic front than being yet another lethal dose on the health front. Its outbreak has put all major countries on the back-foot with a host of new travel restrictions, which is going to be a major impediment to the recovery of the economic supply chain in the coming times. However, the severity of the economic impact will depend on how dangerous the new variant proves to be, and how effectively the existing medical treatment protocol guards the human lives against it.
Now the fears loom large that the global growth story won’t be in line with the projections made earlier when mass vaccination of populations against the Covid-19 infection was underway. Even as intensity of the lethal behavior of Omicron is yet to be assessed, various agencies and economists have already anticipated a halt in economic recovery and are revisiting their growth projections, forecasting downward trend for 2022.
Even as the International Monetary Fund (IMF) has expectations of a growth of 4.9 per cent for the next year, it didn’t rule out the main threat from variants of the virus. As Omicron has hit the scene as one more variant, its impact could be dangerous as economic lockdowns across various global locations have again witnessed a comeback. Notably, Oxford Economist have dished out their prediction much before the Omicron variant emerged on the scene predicted that 2022 growth could fall to around 2.3 per cent, as compared to the 4.5 per cent. Taking this prediction into account, the stage seems set for the economy to slide down owing to the weight of this new variant of the virus.
For all practical purposes the outbreak of Omicron is going to be yet another tough challenge for the governments. The medical treatment protocol is already in place where vaccination has been the main arsenal in hand to neutralize the lethality of the virus. But the economic woes brought in by the virus are something more dangerous as it is hugely loaded with elements of pushing mass populations across the globe into starvation. Nothing will be more painful than witnessing people losing their lives for want of food in a world which is projected as a modern world just short of giving life to the dead!
It would be interesting to watch the capabilities of the governments to roll out economic stimulus packages to support their citizens in case Omicron-induced lockdowns hit the scene. However, in view of the devastation wrecked by the infection in the second wave would force the people to take extra precautions beyond government measures to stay safe against the new strain. For instance, they would voluntarily limit their own movement and economic activities. This will reduce their consumption level. Once consumption witnesses drop, the demand will automatically fall. Precisely, the markets will face a crisis in demand-supply levels and ultimately it would impact the growth story. Here it is needless to mention that inflationary pressures would also worsen as supply chains get squeezed. To be precise, the Omicron variant has created a climate of uncertainty and fear, directly slowing down the economic recovery.
Though Covid-19 has been an unprecedented health emergency, its impact has been equally deadly on the economy. In the last two years of its global rampage millions have been rendered jobless and millions of households have witnessed a hit on their incomes. However, the experiences gained out of the crisis are learning in nature and can prove productive as far as being ready for similar catastrophes in future is concerned. The virus has permanently embedded itself into our environment and we have to align ourselves to live with the virus without allowing it to harm us. The responsibility of denying access to the virus rests on everybody’s shoulders.
In a way, the outbreak of the virus has been a wake-up call for all of us with regards to health as well as wealth. It has triggered a change in the way of looking at our personal finances. Now, the outbreak of the Omicron variant of the virus is yet again an opportunity to fine-tune our financial capabilities in line with the given economic scenario.
Let me quote an online survey conducted by Scripbox where it has been revealed that more than 80% of the respondents surveyed say that Covid-19 has been a wake-up […]
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