The Omicron variant caused chaos at holiday get-togethers, travel plans, and gift deliveries. It won't be enough to derail the world's economic rebound, economists said Thursday.
The Omicron variant grew from a story to the world's main health crisis in a matter of weeks, raising new concerns that the Pandemic will linger well into the new year. The variant's rapid spread put new pressure on recovery hopes because Americans already lamented high inflation and supply-chain problems.
The last two coronaviruses waves were problematic, but Bruce Kasman said in a note to clients that Omicron might be less problematic. The new surge of infections is expected to look different than previous ones, mostly because of its spread. The Omicron wave will form several unique trends in early 2022, the team said.
The Omicron variant won't pose the same economic threat as previous waves.
1. Every country is facing Omicron at the same time.
The first coronaviruses wave traveled west from China. The Delta wave appeared in India and the UK before spreading to the US and Europe. The Omicron wave is hitting everyone at once.
"Omicron's rapid spread and reduced virulence point to a more synchronized wave across the globe," the economists said. Controls are not stringent enough to prevent the virus from spreading around the world before the end of the quarter.
It's possible the world gets through the Omicron variant at the same time if the resurgence takes a path similar to the Delta variant. The latest wave could be cooling off. The South African government said that the Omicron wave is likely past its peak and that the variant didn't cause a large jump in deaths. The note suggests that the pain won't be as bad as the Delta wave, and that other countries' waves could soon crest.
2. The slowdown won't hit hard.
The bank said that Omicron's rapid proliferation seems to avoid the kind of geographical damage that curbed growth in 2020.
A more synchronized wave may place broader downward pressure on global growth, but it is unlikely to generate the concentrated regional weakness of earlier COVID waves.
The damage was so bad that some European countries went back into recession. The Asia Pacific region was slammed by the Delta wave. The current wave isn't likely to fuel the same kind of regional slump since more of the world's population is now vaccine-vaccinated.
3. Supply chain recovery is expected to continue.
The supply-chain harm powered by prior waves is not likely to emerge as Omicron spreads, according to a memo from the team.
The previous variant drove shipping costs higher. The supply-chain recovery will probably continue even if Omicron slows its pace, the bank said.
The economists said that the wave is likely to damp service-sector demand and is unlikely to disrupt the path of global industry.
Omicron will make for a more volatile recovery in early 2022, but as the wave peaks around the world, people can rest assured the variant won't be as disastrous as those that came before it.