On Monday, more countries closed their borders, casting a shadow over the economic recovery following the two-year coronavirus pandemic.
Rating agencies Moody’s Investor Services and Fitch Ratings Agency said on Monday that after the World Health Organization stated that the risk of a surge in infection from this variant is very high, the Omicron COVID-19 variant may harm global growth prospects, while also pushing high price.
Moody’s Deputy Managing Director Elena Duggar told Reuters in an email comment: “Omicron’s variant poses risks to global growth and inflation, especially when the supply chain is already tight, inflation is rising, and A period of labor market shortages.”
Duggar said that in the upcoming holiday travel and consumption season, this variant may also hit demand.
“If the new variants affect global market risk appetite, it will cause further financial pressure on bond issuers with greater financing needs. For example, emerging market countries that rely on international market borrowing may face higher refinancing risks,” she said.
Fitch Ratings also stated that it is too early to include the impact of the Omicron coronavirus variant into its economic growth forecasts until it knows more about its spread and severity.
Fitch said: “We currently believe that it is unlikely that there will be a large and synchronized global recession like the first half of 2020, but if new variants emerge, rising inflation will complicate the macroeconomic response.”
On Monday, more countries closed their borders, casting a shadow over the economic recovery brought about by the two-year pandemic. Industry sources said that major airlines acted swiftly to protect their hubs by restricting passenger travel from southern Africa, because they fear that the spread of new variants will trigger restrictions from other destinations outside the directly affected areas.
US President Joe Biden urged Americans not to panic, and said that if new vaccines are needed, the United States is working with pharmaceutical companies to develop emergency plans.
Biden said the country will not resume the lockdown this winter, but urges people to get vaccinated, get boosters and wear masks.
An infectious disease expert in South Africa where scientists discovered Omicron for the first time said that it is too early to say whether this variant causes more severe symptoms than previous variants, but it does seem to be more contagious.
Duggar told Reuters that past experience with variants shows that even with some restrictions on international travel, the spread of Omicron variants may be difficult to stop.
“If the new variants lead to another wave of new coronavirus infections, the economies most affected will be those with low vaccination rates, high reliance on tourism, and providing fiscal and monetary policy support to offset the impact of the new wave of growth. Economies with lower capacity to infect.”