The pandemic may be done for, but the threat of variants remains. Omicron has delivered its baggage. According to Fortune, IMF predicted global growth in 2022 to be at nearly five per cent, but with Omicron, these speculations didn’t look so rosy. For Goldman Sachs, one of the biggest US investment banks, Omicron presented a fall in the growth of the US economy from 4.2 to 3.8 per cent, making West Virginia Senator Joe Manchin say no to Biden’s Build Back Better recovery plan.

In December 2021, crude oil, crypto, equity stocks, and treasuries took a serious hit globally. Inflation in the US in October 2021 was at a record high, a phenomenon appearing pervasive globally, with food prices seeing the biggest hikes due to supply chain disruptions. BofA Securities’ global economist Ethan S. Harris posited that these supply chain disruptions will most likely expand by spring this year as the spread of Omicron will increase in Asian countries directly involved in global supply chains.

With the subsiding of the variant, things seem to have improved economically, and optimism runs high. Is it practical, however, to stay optimistic about the rest of the year? While positivity doesn’t hurt, uncertainty persists around things going back to pre-pandemic levels. The Economist’s Global Normalcy Index was created to look at the changes in three main categories and points out that remote work will continue as a major way of doing things.

Also, the World Bank’s Global Economic Prospects report suggests that global growth will drop to 4.1 per cent in 2022 from 5.5 per cent in 2021 and 3.2 per cent in 2023, triggered by the lack of financial support from governments worldwide. While 2023 would signal the year when advanced economies will have reached their pre-pandemic output levels, for developing economies, output levels will be 4 per cent lesser than the pre-pandemic levels, thereby increasing the inequality prevalent in the world.

Labour shortages are also becoming glaringly visible in many parts of the world, especially in the US, where the Great Resignation — now combined with Omicron — will cause skilled worker shortages. This will, in turn, affect unemployment levels, which will be slower to recover. CEO of staffing agency Randstad North America, Karen Fichuk, believes that attracting workers will require better health and safety initiatives, benefits and pay structures, training, and advancement opportunities.

Kearney experts predict that lower interest rates in the years 2021 to 2023 will increase debt at the corporate level and lead to more mergers and acquisitions. They further suggest that the climate crisis must be addressed through corporate sustainability programs to offset rising food prices from affected agricultural outputs.

Overall, recovery in the year 2022 will be off to a slow start in the second quarter, affected by increased supply chain, inflationary pressures, and the efforts of businesses to fill in vacant positions. Nonetheless, by 2023, things may reach the “normal” levels from the pre-pandemic times for many advanced nations, while developing nations might still struggle to catch up.

Arslan Ahmed | Staff Writer

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