Nicolas Woloszko, who tracks GDP index for OECD, has been tracking countries economics bas on their pre-pandemic numbers. He has seen that across "middle to high income" countries are about 2.5% below their GDP, which is better than the 5% in the early days of the pandemic. This is a positive sign that economies are starting to recover to the way they were before the pandemic.
So far most countries have not increased restrictions based on the Omicron variant and this is one of the reasons why there are not as many fears in a huge dip in the economy as there was at the beginning of the pandemic. The only "middle to high income" country that was under lockdown was the Netherlands and that ended on January 26th. Goldman Sachs compared how restrictions were imposed for the Delta variant versus the Omicron variant and the restrictions were similar even when there are almost five times the amount of people diagnosed with Omicron.
This has caused a large number of people to miss work because of covid or taking care of someone with covid, the number is around 8.8 million in the United States at the start of 2022 according to the Census Bureau. This definitely has helped increase the numbers when it comes to the labor shortage. Although, the Omicron variant has caused issues firms do not seem too worried about its effects as most of the numbers in countries seem to be falling
Article: https://www.economist.com/finance-and-economics/how-is-omicron-affecting-the-global-economic-recovery/21807361
Author: The Economist, Jan. 29, 2022 edition
When news about Omnicron came out and businesses feared another lock down, I feel that they would've started preparing for it. How would this have effected the markets if they prepared for it and it never happened. I'm curious to see how the Netherlands compare the rest of the world.
ReplyDeleteI highly doubt there will be another covid variant that will devastate the economy like during the start of the pandemic. Unfortunately, Omicron is highly contagious, so many people have to call off of work, causing businesses to be forced to close for days at a time.
ReplyDeleteI also don't think that there will be another COVID variant that will shut down the economy like at the beginning of the pandemic, but it is interesting that most countries have not increased restrictions even though the Omicron variant is more contagious than the Delta variant. It makes we wonder if the labor shortage we are currently experiencing could have been helped or decreased in any way if the United States had put some more restrictions in place when Omicron started to become the dominant strain.
ReplyDeleteIs it possible maybe that when Omicron news was released, firms felt much more prepared for a lockdown? Maybe that's why we did not see such a dip in GDP? Or maybe it was a combination of not expecting such extreme measures and a feeling of preparedness.
ReplyDeleteI think there is always some uncertainty when it comes to Covid and what it can do to the economy. We are currently seeing the effect with massive labor and supply chain shortages. The fear of another lockdown has been in the back of many individuals minds as we continue to learn about new variants. I think it will be interesting to see how firms and workers respond to the increased uncertainty.
ReplyDelete