IMF warned that Omicron could slow the global economic recovery, as happened with the Delta variant.
As is known, the Omicron variant has spread rapidly in at least 40 countries since it was first reported in South Africa last week. In response, many governments have tightened travel rules to prevent the entry of this variant into their countries.
There is still a blind spot about this Omicron variant virus. Researchers say the virus could have picked up genetic material from another virus, possibly the one that causes the common cold, which would make it easier to evade the defenses of the human immune system.
Parts of Europe and the United States are grappling with a wave of infection with the better-known Delta variant. New tensions could further destabilize the economy still emerging from the COVID-19-related lockdowns and disruptions.
A company Christmas party in the Norwegian capital Oslo resulted in at least 13 infections, making it the largest outbreak outside South Africa, officials said.
World Health Organization (WHO) chief scientist Soumya Swaminathan told Reuters Next that the fast-spreading variant would have to become more infectious to beat Delta, which accounts for 99% of current transmissions.
In its most recent World Economic Outlook, the fund projects global growth of 5.9% this year and 4.9% in 2022. However, the United States and other major economies experienced sharp downward revisions after the spread of the Delta variant and caused some friction.
The IMF’s latest forecast raises concerns that global supply chain problems and uneven distribution of vaccines are slowing the rebound and causing some countries to fall behind. The surge in demand in many developed countries coupled with shortages of key components such as semiconductors has triggered a wave of price hikes.
Less than two months ago, Georgieva expressed confidence that inflation would not be a “runaway train” but on Friday said the US Federal Reserve should raise interest rates in 2022, rather than in 2023, as the IMF had previously predicted.
The Fed, which cut lending rates to zero in the early days of the pandemic, has already begun to roll back its stimulus measures and has signaled it will speed up the process, which would put it in a position to raise interest rates to zero by the middle of the year.