Washington – The global economic growth is in danger of slowing down due to the proliferation of the Omicron variant of Covid-19, warned US Secretary of the Treasury Janet Yellen. The new variant could worsen problems in the supply chain internationally and depress demand, warned Yellen at this time. Simultaneously, the US Federal Reserve has expressed fears that Omicron could mount inflation in the United States.
The scope of Omicron variant outbreak, which began in South Africa, has multiplied. It has surfaced that the Omicron, which had come to the fore last week, has reportedly spread to almost 40 countries. The number of patients in Europe is rising broadly, with a record number of the patient numbers reported during the pandemic times in many countries. Following Europe, the number of patients gradually begins to grow in the US and Asia, which has created an atmosphere of concern.
Moreover, Yellen has expressed fears that the Omicron variant could threaten the global economy against this backdrop. ‘The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation. Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labour market and intensify supply-chain disruptions. Now the new variant, the Omicron variant – the pandemic could be with us for quite some time and hopefully not completely stifling economic activity, but affecting our behaviour in ways that contribute to inflation. We’re very uncertain at this point just how significant a threat it’s going to be. Hopefully, it’s not something that’s going to slow economic growth significantly,’ said Yellen.
Whereas, a senior US Federal Reserve official has expressed fears that Omicron could spark inflation in the country. ‘If it turns out to be a bad variant, it could exacerbate the upward price pressures we’ve seen from the supply-chain problems. The fear of the virus is still one of the factors holding people back from re-entering the labour force. We have to entertain the risk that the persistently high inflation numbers could become more embedded,’ Cleveland Federal Reserve Bank President Loretta Mester has raised concern.
The Organization for Economic Co-operation and Development (OECD), followed by the US Treasury Secretary and the Federal Reserve, has also pointed out that the global economy could be affected by Omicron. ‘We are concerned that the new variant of the virus, the Omicron strain, is further adding to the already high levels of uncertainty and risks, and that could be a threat to the recovery,’ warned chief economist of the OECD, Lawrence Boone.
Meanwhile, the World Health Organization (WHO) has issued an alert on Omicron. The organisation has warned that the spread of this variant is increasing every day. Moreover, the WHO officials have expressed fears that the number of patients of Omicron may be much higher than the number of patients reported so far. Attention has also been drawn towards the new variant being more contagious.