Ómicron, the new variant of Covid-19, is a new risk both for the global economy – which is still in a recovery stage – as well as for inflation levels, already high throughout the world, warned the rating agency Moody’s.
In a comment for its clients, Moody’s stressed that concerns about this new variant have led several countries to implement new travel restrictions in recent days, and it expects this to increase in the coming weeks until more information is available. science about Ómicron and the risks to the health of the population.
“The discovery of Ómicron reinforces our view that the Covid-19 pandemic continues to be a threat to health, as well as the main source of uncertainty for the global economy and a driver of financial market volatility,” he added.
The rating agency indicated that the new variant “seems to have been identified early”, so there is room for policies to be taken to prevent its spread, in addition to previous experience with other variants, such as the Delta, which caused new outbreaks in various countries.
However, he recalled that the information available on Ómicron does not yet reveal if this variant is really spread more quickly, if it is serious or if the vaccines that have already been provided to the population can cope with it.
Last week, financial markets were filled with uncertainty as the World Health Organization (WHO) declared that this new variant was of concern due to the large number of mutations it presents, some of which suggest an increased risk of Covid-19 reinfection.
This variant, according to the first reports, has increased the cases in almost all the provinces of South Africa, in addition to that it is spreading faster than previous outbreaks of Covid. At the news, the bags fell and different countries announced travel restrictions to South Africa, this to try to prevent a worldwide spread.
“The appearance of the new variant occurs during a period of fragile economic recovery, with alterations in supply chains, high inflation and a shortage of the labor market,” said the rating agency.
Possible impact on services
Moody’s explained that, given the uncertainty caused by this new variant, demand could be affected by fears that the population may feel about the health situation.
In this sense, he explained that this could prevent fewer people from engaging in activities that consist of contact with others, such as services, and in this sense that the demand for those related to tourism decreases in a period where generally the expense associated with they increase.
“Business disruption resulting from the spread of the new variant could prevent supply chain stresses from easing, reduce production capacity and fuel further cost pressures in sectors exposed to global supply chains,” explained on the inflation side.
The most affected
“Countries with an assured supply of vaccines and effective administration systems, and high levels of acceptance of the vaccine by the public, will continue to be better positioned,” he said.
Meanwhile, he warned that the most affected economies will be those with the lowest vaccination rates, greater dependence on tourism and that have less capacity to offer the population additional support through fiscal and monetary policy to counteract the impact on the growth of the resurgence of infections.
He added that the severity of the restrictions will vary in the countries and will depend on factors such as the public health situation they live in, the support of society to obey the restrictions, as well as “the will of the authorities to assume the economic and political costs.” that these new restrictions may cause.
Against this background, Moody’s specified that it would keep its growth outlook and country ratings unchanged because the information available on this variant and the policy actions taken to date do not give rise to significant changes to the projections right now.
Reference-www.eleconomista.com.mx