Global growth will slow this year and a worst-case scenario is not ruled out under the effect of the Omicron variant, which is spreading like wildfire on all continents, accentuating labor shortages and logistical problems, a warned the World Bank on Tuesday.

The institution revised its forecast for global GDP growth for 2022 down by 0.2 point, to 4.1%, after 5.5% in 2021, also down 0.2 point compared to the estimate. last June.

The most feared first trimester?

But, according to different hypotheses, "the simultaneous economic disruption caused by Omicron could further reduce global growth this year, by 0.2 to 0.7 percentage point," the institution said, which would bring growth to 3, 9% or even 3.4%.

In this worst-case scenario, "most of the shock would be felt in the first quarter of 2022, followed by a notable rebound in the second quarter," says the World Bank.

"The Omicron variant shows us once again that the pandemic is still with us and we must learn to live with it," said Ayhan Kose, head of forecasts for the World Bank, in an interview with AFP.

He points out that this fourth wave currently results in fewer restrictions than the initial wave of 2020. "And if the wave were to subside soon, the economic impact would be rather benign," he said.

Fear of labor shortages if Omicron were to take hold

But "if the variant were to take hold for a long time, with the number of infections remaining high and pressurizing health systems, then growth would be weaker", he adds.

For in such a scenario, labor shortages would be more acute, further disrupting global supply chains and fueling inflation.

Faced with galloping inflation, the American central bank (Fed) could suddenly raise rates, which would increase the cost of borrowing for emerging countries, already subject to record debt.

In this context, business and household confidence is likely to erode.

Ultimately, consumption and trade flows, the engine of global growth, risk slowing down further.

Vaccination as a key element

For 2022, the World Bank has already revised the growth in the volume of world trade down to 5.8% (-0.5 point) after a rebound of 9.5% last year. Ayhan Kose stresses that vaccination remains the key element. Because the threat of new, more transmissible or virulent variants will persist until a substantial part of the world's population is vaccinated. “The share of the vaccinated population in many economies is expected to exceed 70% by mid-2022, but the prospects for immunization progress remain uncertain in a number of countries,” especially poor countries, observes World Bank . At the current rate of vaccination, "only about a third of the population in low-income countries will have received even a single dose of vaccine by the end of 2023," she laments. his report.

The United States and China not spared

The two leading powers in the world, the United States and China, engines of global growth, are not spared by the slowdown and the threat of Omicron, also notes the World Bank.

American growth has thus been revised down sharply for 2022 to 3.7% (-0.5 point) after 5.6% in 2021 (-1.2 point).

The World Bank notes that the $ 1.2 trillion 10-year infrastructure spending plan, signed in November, "is only expected to give economic activity a small boost in the short term, with most of its effects coming to an end. produce beyond this year ”.

And, "stubborn inflation and even faster monetary policy tightening could lead to weaker than expected growth."

Chinese growth is now estimated at 5.1% (-0.3 point) against 8% (-0.5 point) in 2021. It is decelerating "more than expected", notes the institution.

"The possibility of a marked and prolonged slowdown in the heavily indebted real estate sector - and its potential effects on house prices, consumer spending and local government financing - constitutes a significant downside risk to the outlook" of the Chinese economy, concludes the Bank.

The International Monetary Fund (IMF) is due to release its own forecast on January 25.

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