Fear surrounding the new variant of the coronavirus continues to mount.

The OECD was thus concerned on Wednesday about the economic impact of Omicron.

"We are concerned that the new variant, the Omicron strain, adds more uncertainty to that already at work, which could pose a threat to the economic recovery," said Laurence Boone, the economist in head of the Organization for Economic Co-operation and Development.

In the conclusions of its interim economic outlook, the Organization for Economic Co-operation and Development says that "the priority remains to ensure that vaccines are produced and distributed as quickly as possible around the world, including booster doses. ".

"It would be a big mistake to think that the work is almost finished (...) The news on the Omicron variant is undoubtedly a reminder of this reckless failure", pointed out the chief economist. 

Vaccinating the planet would cost only 50 billion

The developed countries of the G20 have thus spent 10,000 billion dollars to protect their economy during the crisis while vaccinating the planet would only cost 50 billion, she said, also questioning the logistical difficulties in the distribution of vaccines.

Although they do not take into account the latest developments around the Omicron variant, the level of virulence of which is still uncertain, the OECD's global growth forecasts have been revised down slightly by 0.1 point to 5.6 %, compared to previous forecasts for September.

Activity next year would however be unchanged at 4.5%.

Fall in its growth forecast in the EU

According to analysts at Oxford Economics, this variant could cost between 0.25 percentage points in global growth next year, if it turns out to be relatively harmless, and more than 2 points, if a large part of the world population had to confine itself again. In the wake of the economic recovery this year, "striking imbalances have appeared", underlines the organization, between developed countries on the one hand and emerging and developing countries. These differences reflect, according to the institution, inequalities in health systems, public policies, worker shortages in certain sectors, and inflation "more sustainable than expected". 

For the euro zone, the OECD forecasts a slight decline in its 2021 growth forecast to 5.2%.

On the other hand, it expects an improvement for France with a GDP up 6.8% this year (+0.5 point) and 4.2% next year (+0.2), and for Italy. respectively up 6.3% (+0.4 point) and 4.6% (+0.5). 

Shortages of key materials

Germany is suffering for its part "shortages of key materials" for its industry and sees its forecast fall by 0.5 point next year to 4.1% but stabilize at 2.9% this year. The United Kingdom shows a slight rebound from previous forecasts, to 6.9% but a decline for 2022 to 4.7%. As for the United States, the OECD has again lowered its expectations, this time to 5.6% this year and 3.7% next year. “The current withdrawal of budget support is now having a negative impact,” she explains.

In Asia, after having had a solid start to the year, China "stalled in the second half of the year," says the OECD, which sees 8.1% growth this year and 5.1% next year , down 0.4 and 0.7 points.

The setbacks of Evergrande, an ultra-indebted Chinese real estate developer "weaken investment in real estate, a major provider of growth."

Peak inflation by the end of the first quarter

On inflation, another major fear of the moment, the OECD forecasts that price indices should peak by the end of the first quarter of next year in most advanced and emerging countries, before gradually falling.

The institution also expects that part of the supply difficulties should dissipate by the end of the year.

The OECD calls on central bankers to "make it clear to what extent inflation figures above their targets will be tolerated" as part of their interest rate policy.

Federal Reserve Chairman Jerome Powell said on Tuesday that "the risks of more persistent inflation have increased," and that he is considering a faster reduction in asset purchases, paving the way for a higher rate hike. quicker than anticipated.

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  • Economy

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  • Europe

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  • Omicron variant

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