Omicron variant worries markets and risks weighing on growth

The new Omicron variant puts the markets back into uncertainty and risks further weighing on supply chains and the global economic recovery.

AFP - PAUL FAITH

Text by: RFI Follow

2 min

The main European stock markets were down on Tuesday, November 30.

Wall Street was taking the same path, while oil relapsed.

The new Omicron variant risks weighing on the global economic recovery.

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The advance of the Omicron variant brings market concerns back to the forefront. And it is not the statements of the CEO of Moderna, the American pharmaceutical company, which may reassure them. Indeed, the latter considers it unlikely that the vaccines currently available against Covid-19 will be as effective against this new variant as against the previous strains. And he estimates that it would take several months to develop a new serum.

Another apprehension for the markets: inflation.

It resurfaces as central banks begin to reduce their support for the economy.

The advance of the new variant could call into question this strategy, believes Jerome Powell.

According to the boss of the Fed, there is no reason to panic, but the health situation risks weighing on employment and inflation.

An uncertainty shared by the G7 which calls for urgent action.  

In this context, oil prices have fallen as concerns for demand become clearer after the appearance of the new variant of the coronavirus.

OPEC members and their allies are due to meet on Thursday, December 2 to decide on their production level for early 2022. 

► To read also: Covid: the Omicron variant is blowing a wind of panic on the planet

French growth threatened?

The new Omicron variant, with little-known danger, is added to the fifth wave of Covid-19 which is sweeping over Europe and not sparing France.

It gives rise to fears of an economic slowdown which could weigh on French growth.

Despite the reassuring remarks of the Minister of the Economy Bruno Lemaire, it is a new era of uncertainty which is opening for many sectors, such as

tourism and transport,

which have been idling for almost two years.

Professionals fear the introduction of travel restrictions around the world.

The concern is also palpable for the automotive sector far from being out of the

semiconductor shortage

.

However, the president of Medef Geoffroy Roux de Bezieux calls to " 

keep his cool

 " while stressing that if the new variant causes massive drops in activity, the question of state support will arise.

To which the Minister of the Economy replied in the affirmative.

Confident in the economic growth of France, Bruno Lemaire describes it as " 

solid 

".

It currently stands at 6.7%.

According to INSEE, the French economy experienced in the third quarter one of its best growth rates in 50 years, at over 3%.

Bruno Lemaire said he was worried about other difficulties.

In particular those of supply and

recruitment

encountered in the construction industry, public works, hotels and restaurants.

He pays particular attention to the rise in

inflation

which accelerated to 2.8% in November from 2.6% in October. 

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