Brussels (Brussels Morning) The Organisation for Economic Co-operation and Development (OECD) revised its global economic outlook because of Omicron fears on Wednesday.
It pointed out that global economic recovery has lost momentum and is increasingly uneven, predicting that the emergence of the new SARS-CoV-2 variant will threaten recovery, DW reported.
The OECD lowered its forecast for global economic growth from 5.7% in September to 5.6% while sticking with its prediction of 4.5% for 2022.
OECD chief economist Laurence Boone noted “we are concerned that the new variant of the virus, the Omicron strain, is further adding to the already high levels of uncertainty and risks, and that could be a threat to the recovery.”
He urged policymakers to make sure that COVID-19 vaccines are made and distributed quickly across the world, noting that logistics still represents the biggest obstacle to the global COVID-19 vaccination push.
The emergence of the new strain comes against the backdrop of a slowing global recovery, largely due to supply chain disruptions, rising inflation and a new wave of infections, especially in Europe.
Politicians taking action
For the most part, experts are refraining from making predictions about the emergence of Omicron, but politicians have begun to re-impose travel restrictions due to the fears, now threatening the global economy.
“In terms of forecasting, this aggravates the risks we have already identified, whether it be tensions in supply chains, closed borders or health checks being reinforced”, Boone observed.
An upbeat prediction right now, he said, is that “this is a variant like we have seen since the beginning of the pandemic”, which, while “it pushes back the recovery… does not disrupt it.”
However, if it proves to be worse, “we will have to protect ourselves much better…demand could be hurt, but that could also bring down price pressure.”
Meantime, Oxford Economics analysts predicted this week that Omicron could cut global economic growth more than two percentage points next year if it should become the dominant variant.