Expectations of an increase in unemployment in America .. and slow growth in Europe

Warning of the impact of “Omicron” in the global economic recovery

Some countries are reimposing travel restrictions in an effort to control the outbreak of the virus.

AFP

The Organization for Economic Co-operation and Development has warned that the new slowdown associated with the outbreak of the “Covid-19” virus may cause an increase in unemployment in the United States of America, and a noticeable suffering for the rate of economic growth in the European continent, pointing out that the outbreak of the “Omicron” mutant. The new may delay the global economic recovery, but it will not disrupt it.

The organization expected a rapid and irregular economic recovery, due to the turmoil caused by the “Corona” pandemic, according to the American newspaper “New York Times”, noting the remarkable imbalances in growth between developed and least developed countries, as well as among the largest industrialized countries.

Differences

The organization's chief economist, Lawrence Boone, said that there are fundamental differences in the policies that Europe and the United States have followed to deal with the repercussions of "Corona", indicating that Europe was focused on protecting jobs during the crisis, and as a result, the employment rate is now already at the level it was in before the crisis.

She added that the United States, in contrast to Europe, focused largely on supporting household incomes rather than jobs, which led to a faster recovery in GDP.

Threat Bonn explained that if the global economy stumbles again, the European economy will be affected, while jobs in the United States will be affected, and continued: “Despite the effects of the new variable (Omicron), the economic outlook remains (optimistic) but with caution.”

Boone warned that the omicron could add already high levels of uncertainty and could threaten the recovery.

She emphasized that whatever the differences between the policies followed in North America and Europe, the most obvious cases of inequality are between advanced and emerging economies, where growth and vaccination rates differ from global levels.

Bonn stated that the “Group of 20” collectively spent about 10 trillion dollars to confront the pandemic, while a small part of this amount was allocated to providing vaccines to poor countries, although this type of support was necessary for the recovery of the global economy.

She pointed out that the latest forecasts of the Organization for Economic Cooperation and Development reflected concerns about long-term inflation recently expressed by the President of the US Federal Reserve, Jerome Powell.

It is noteworthy that the emergence of the “Omicron” mutant coincided with the start of the recovery of the global economy, which lost some of its strength with global supply chain disruptions, high consumer prices, and an increase in cases of “Corona” virus, especially in Europe.

Although experts refrained from determining the economic effects of the new mutation, some governments around the world began to rapidly re-impose travel restrictions, in an attempt to control the outbreak of the virus, which threatens the global recovery.

supply chain

The severity of the pandemic can appear in different forms, said Lawrence Boone, chief economist at the Organization for Economic Cooperation and Development, explaining that more disruptions in the supply chain will exacerbate inflation, but a new wave of restrictions related to the “Corona” virus could reduce demand instead. Instead, it causes inflation to fall faster.

The Organization for Economic Cooperation and Development confirmed that the new mutation will not disrupt the recovery, but it may delay it.

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