Intensity of Omicron on economy
Intensity of Omicron on economy
December 20, 2021 by eMedEvents

The intensity of omicron on the economy will depend on the speed of transmission, virulence, associated hospitalization rates, and death rates.  It is highly dependent on vaccines' effectiveness and the antiviral medications that are taken against it.

Impacts of Omicron on Civil Aviation:

The Omicron variant has brought a major setback, the International Civil Aviation Organization (ICAO) actively monitors the economic impacts on civil aviation and regularly publishes updated reports.  It also includes the adjusted forecasts for the coming days.

Impacts of Omicron variant across industries:

Various COVID variants have already had a wide impact on the global economy.  The latest one on the list is  Omicron and any further spread of this variant is going to have a devastating impact on various sectors of the economy, affecting the functioning of manufacturing and service industries, causing devastating economic loss. It may further affect the livelihood of millions that earn their living from these industries.

According to IACO, the civil aviation sector supports 65.5 million jobs globally, providing direct employment to 10.2 million individuals. Another 55.3 million are indirectly dependent on the aviation sector, such as tourism.

Tourism is one industry that heavily relies on aviation.  By facilitating and promoting tourism, the airline industry will be in a better position wherein it will be able to generate the required economic growth thereby alleviating poverty to a great extent. Approximately 1.4 billion tourists are traveling every year by air.  In the year 2016, the aviation industry along with the tourism sector hadcontributed$897 billion a year to the global GDP. Both civil aviation and tourism industries are the worst hit due to forced shutdowns during the pandemic.

Markets in a waiting game:

Global markets have not been stable; hence, seesawing. As a result, the investors for business are unable to judge the economic implications of the new variant.

According to sources, in the last week, Omicron's emergence and the intensity of omicron on the economy led to a major crash in the global stock and oil markets.  The markets did regain some of the lost ground but nothing is certain as yet.  Reports also suggest that the omicron variant could dodge existing COVID vaccines.

With the governments, swift impose on travel restrictions global markets were further spooked by to help keep the new variant at bay.

Closed Movie Theaters Leave Void:

As many as more than 600 small towns and big cities remain shut even after almost two years after the onset of the pandemic with no signs of recovery.

Initial data suggests that the Omicron variant emergence has had less impact on theatre sales and revenue. However, the willingness to go to theatres by the audience has not increased since June and the latest data, from September, revealed that people are waiting for a significant reduction in risk from Covid that has grown.

After almost two years into the Covid-19 pandemic, reports suggest that about 630 movie theaters remain closed to date across North America. And many may never reopen even in the days to come, leading to a complete shutdown.

Omicron has further accelerated trends that preceded the pandemic.  Currently, with major films becoming available on the OTT platforms, there is a significant decline in in-person theater viewing.

It is seen that Americans are back again jamming football stadiums and visiting theme parks for entertainment, the public places may remain closed if Omicron gets intensified.

Is Omicron a threat to the global economy?

The western governments could enforce fresh restrictions, amidst financial support for businesses and households. However, the leading economic forums like Economic Co-operation and Development (OECD) predict that the Omicron variant may trigger a drastic slowdown of the global economy further.

The OECD’s biggest point of concern is that the Omicron variant is spreading rapidly.  A renewed Covid wave could worsen global economic recovery, considering the persistently rapid high levels of inflation.

There will be a serious disruption to the supply chains if Omicron becomes the dominant Covid-19 variant regarding transmissibility and vaccine resistance.  It could further result in higher inflation for a prolonged period an

The World Health Organization (WHO)classified  Omicronas as a 'variant of concern'.  Recently scientists issued a warning against the virus, its high transmissibility, and low vaccine penetration across the globe.

What happens if Omicron becomes severe?

If Omicron, the coronavirus variant continues to pose a serious threat than expected, it could end up forcing various governments around the globe to impose a higher level of restrictions.  Governments foresee a terrible blow to demand goods and services due to the curb in economic activity that is very similar to the earliest phase of the pandemic in 2020.

While there is still no way to exactly predict the economic damage from the global COVID-19 coronavirus pandemic and the current Omicron variant,  there is widespread agreement among economists that it will definitely pose a negative impact on the global economy. 

How could things go right in 2022?

It isn't all doom and gloom. U.S. budget policy, for instance, could stay more expansionary than it appears now - preventing the economy from going over the fiscal cliff and boosting growth.

Due to pandemic stimulus and enforced frugality during the lockdown, households have trillions of dollars in excess savings worldwide. If those savings are spent faster than expected, it will for sure, accelerate the growth.

It was far worse than economists had predicted in 2020, but recovery was surprisingly rapid in 2021. Let us fight Omicron with the same optimism.

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