New variant heightens global economic uncertainty

In Europe, Austria and Slovakia are currently under 14-day lockdown. Japan has banned the entry of all foreign nationals into the country, while the US has banned all to-and-fro flights from southern Africa—South Africa, Botswana, Zimbabwe, Namibia, Lesotho, Eswatini, Mozambique and Malawi—in its effort to stop the omicron variant from reaching its shores.

These announcements are also indirectly dampening the festival spirit and people are now not likely to go shopping for Christmas as it was expected, say a fortnight ago. In turn, companies are no more optimistic as they were earlier, and may re-think on their upcoming expansion plans. The new variant has also made it difficult for economists to predict economic outlooks.

At present, all eyes are focused on the medical scientists for their expert opinion on several questions, like how quick the new variant can be transmitted from one person to another, are the existing vaccines effective, and is lockdown a better way to halt the spread of virus.

Irrespective of what the scientists conclude, the world has come to understand that the virus is here to stay, and it will continue to be a threat to the global economy, at least, for the next few years. Meanwhile, if the new variant takes an ugly turn—which no one can predict as of now—governments and central banks may run out of options, as many of them have already given all the possible stimulus last year in their effort to boost growth in their countries.

Fibre2Fashion News Desk (RKS)