IMF Warns Of Slow Global Economic Recovery Due To Omicron

In an online event for Reuters on the global economy, IMF Chief Kristalina Georgieva said that Omicron may “downgrade” its October projections for global growth.

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New Delhi: The emergence of the new covid variant Omicron might decelerate global economic growth, suggested the International Monetary Fund (IMF) on Friday. In an online event for Reuters on the global economy, IMF Chief Kristalina Georgieva said that Omicron may “downgrade” its October projections for global growth.

“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,” she was quoted as saying by the AFP.

In October 2021, the IMF had projected the economic growth to be 5.9 percent in 2021 and 4.9 percent in 2022. However the major economies suffered sharp downward revisions after the Delta variant, she added.

“Even before the arrival of this new variant, we were concerned that the recovery, while it continues, is losing somewhat momentum,” she said referring to the problem of inflation after the manufacturing units were affected by the covid-19.

“The Delta variant proved to be a disruption that caused some additional delays in production,” she was quoted by Bloomberg. 

The IMF's recent forecast raised concerns about the disruption in the supply chain due to increased demand and shortage of key components like semiconductors.

IMF had also highlighted the uneven distribution of vaccines and healthcare services as a cause of concern. IMF’s concern can be backed by the appeal of South African leaders to relieve the travel restrictions imposed on the country after Omicron was detected there. 

The travel restrictions are set to have an adverse impact on the economy of the country and increase its troubles in the fight against covid-19.