Omicron COVID Variant May Slow Economic Growth, Drive Prices Up

Omicron COVID Variant Slow Economic Growth

With the arrival of the Omicron variant of COVID-19, growth prospects around the world could be in jeopardy, according to updates from rating agencies Fitch Ratings and Moody’s Investors Service on Monday (Nov. 29).

Moody’s Associate Managing Director, Elena Duggar, told Reuters that the new variant “poses risks to global growth and inflation,” particularly as the supply chain issues, inflation and problems with retaining a labor market all compound.

In addition, the variant will likely do damage to the upcoming holiday travel and spending season.

Duggar said that the Omicron variant could have severe effects on risk appetite around the world, which could further strain debt issuers that have big financing requirements. Emerging market countries utilizing international borrowing might face a steeper risk of refinancing.

In a separate statement, Fitch Ratings was unsure of how the Omicron variant would affect the world, as there’s not enough known yet about its severity and transmissibility.

Nevertheless, the arrival of the new variant has the world on edge. Several countries have closed borders or restricted travel, calling to mind earlier phases of the pandemic when things also looked bleak, and airlines have curbed passenger travel from South Africa, where the variant was first detected.

U.S. President Joe Biden has urged Americans not to panic, although he said they should exercise caution. Biden has said the country is working on contingency plans for new vaccines if needed, and he vowed that the country wouldn’t be going into a lockdown.

PYMNTS has written that the new variant didn’t influence Black Friday shopping in North America.

See also: Omicron Variant Fails to Darken Black Friday Selling as Some Restrictions Return

A survey from PYMNTS found that 65% of the 143 million U.S. residents planning to buy gifts made at least one such purchase on Black Friday.

As the new variant is still saddled with many unknowns, nobody can say whether there will be more serious effects on retail or the economy in the coming weeks.