WASHINGTON • The International Monetary Fund (IMF) is likely to lower its global economic growth estimates due to the new Omicron variant of the coronavirus, the global lender's chief said, in another sign of the turmoil unleashed by the ever-changing pandemic.
Omicron has spread rapidly to at least 40 countries since it was first reported in southern Africa nearly two weeks ago, but no deaths have yet been reported, the World Health Organisation (WHO) said, as the authorities worldwide rushed to stem the spread of the heavily mutated Covid-19 strain.
"A new variant that may spread very rapidly can dent confidence, and in that sense, we are likely to see some downgrades of our October projections for global growth," IMF managing director Kristalina Georgieva said at the Reuters Next conference on Friday.
The IMF in October projected that the global economy would grow 5.9 per cent this year and 4.9 per cent next year.
The WHO has warned it could take weeks to determine how infectious Omicron is, whether it causes more severe illness and how effective current treatments and vaccines are against it.
Parts of Europe and the United States are grappling with a wave of infections of the more familiar Delta variant. The new strain could further destabilise economies that are still emerging from Covid-19 related lockdowns and disruptions.
As it is, Bitcoin and other cryptocurrencies plunged yesterday, in another indication of the risk aversion sweeping financial markets. The overall crypto sector has shed about a fifth of its value, sliding to US$2.2 trillion (S$3 trillion), according to tracker CoinGecko.
Zambia became the latest country to have detected its first Omicron cases. Its Health Ministry said yesterday that the three cases are a man living in the district around the capital Lusaka who travelled abroad recently and is showing mild symptoms, a man in Chibombo district who also travelled abroad recently but is asymptomatic, and a woman in Lusaka district who had not travelled abroad recently and had mild symptoms.
Omicron has also forced global airlines to brace themselves for more volatility that could force them to juggle schedules and destinations at short notice.
Swiss International Air Lines said it has suspended flights to Hong Kong until Saturday as a result of tightened quarantine restrictions for crew members, the Swiss unit of German group Lufthansa said yesterday. The move affects four flights from Zurich in all, a spokesman said, adding that Hong Kong was the only destination involved.
Despite the spread of Omicron, the Delta variant remains dominant, and experts, governments and vaccine makers are urging people to take advantage of booster jabs where they are available.
"It would be a serious mistake to slow down now," said Dr Alain Fischer, who coordinates France's pandemic vaccine strategy.
"Our message is: Don't freak out, the plan remains the same. Speed up the administration of a third booster shot," BioNTech co-founder Ugur Sahin said earlier last week.
However, many scientists say that the way to stop the virus spreading is to make sure poorer countries have access to vaccines, not to give blanket booster shots to people in richer countries.
"We need to focus on getting people most at risk vaccinated," WHO's emergencies director Mike Ryan said at a social media event.
REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERG
