IMF Chief Says Omicron Could Dent Global Economic Growth

By Reuters
Reuters
Reuters
December 4, 2021 Updated: December 4, 2021

WASHINGTON—The International Monetary Fund is likely to lower its global economic growth estimates due to the new Omicron variant of the coronavirus, the global lender’s chief said at the Reuters Next conference on Friday.

Omicron has spread to at least 40 countries since it was first reported in South Africa last week, officials say, and many governments have tightened travel rules to try to keep it out.

“A new variant that may spread very rapidly can dent confidence, and in that sense, we are likely to see some downgrades of our October projections for global growth,” IMF Managing Director Kristalina Georgieva told the conference.

Much remains unknown about Omicron. Researchers said it could have picked up genetic material from another virus, perhaps one that causes the common cold, which would allow it to more easily evade human immune system defenses.

The World Health Organization’s (WHO) chief scientist Soumya Swaminathan told Reuters Next that the Omicron variant would have to become more transmissible to out-compete Delta, which accounts for 99 percent of current transmissions.

“We need to be prepared and cautious, not panic, because we’re in a different situation to a year ago,” she said.

Australia became the latest country to report community transmission of the new variant. Officials have found the new strain in 10 U.S. states.

Aside from wreaking havoc in the travel industry, the clampdown has pounded financial markets and undermined major economies just as they were beginning to recover from the lockdowns triggered by Delta.

Germany said it would bar the unvaccinated from all but essential businesses, and legislation to make vaccination mandatory would be drafted for early next year.

Several countries, including Britain and the United States, were bringing forward plans to offer booster shots, but, like travel bans, they are controversial.

Reuters