Does Omicron Spell Economic Chaos?

Medical worker holding syringe and examining a patient of Omnicron

It is said that sometimes, to move forward you have to take a step or two backward. Hopefully, the economic effects of the new Omicron variant of COVID-19 are ripples and not a tidal wave. Our battered economy and the disrupted global economy have suffered enough pandemic punishment. We are on standby while we wait to see what peril lies ahead for us and our economy from the new variant. Just as our economy was moving forward, and now it may be forced to backtrack. 

The Wall Street Journal believes the effects of Omicron may not be as severe as many fear, “The Omicron virus strain could slow global growth, but any hit is likely to be modest.” The scale of damage will hinge on the potency of the strain itself say, economists.

Shockwaves immediately hit the already-troubled airline industry, The fast global spread of the new strain and COVID-19, in general, has been attributed to the worldwide web of international airline flights. Early work on Omicron suggests it may be more transmissible and better able to evade the body’s immune responses. Hence close monitoring at international ports of entry. In Canada, we have already seen it travel from South Africa to Canada and onwards to Hong Kong in a matter of a few short days.

New travel bans have been put in place for Canadians going to Hong Kong. England has suspended all flights from South Africa, Namibia, Zimbabwe, Botswana, Lesotho, and Eswatini. Canada is again cracking down on arrivals from some foreign destinations. Further restrictions are sure to be put in place as we learn more about this new variant.

The battered airline industry is bound to suffer as travellers become hesitant to fly again. As of November 30, anyone catching a flight in or out of Canada had to show proof of double vaccination. The timing couldn’t have been better.

Health experts believe that the first step to controlling Omicron or any other new variant is by ensuring that the populace is sufficiently vaccinated against COVID-19. The big unknown is just how effective the present COVID-19 vaccines will be in restraining the Omicron variant.

Science was expecting mutations in COVID-19, like the recent Delta variant. The possibility of a “Frankenstein mix” of mutations raises concerns. The hope is that new variants remain vulnerable to current vaccines. If not, revisions to vaccines will be necessary.

Current vaccines may well continue to ward off severe illness and death, though booster doses may be needed to protect most people. The makers of the two most effective vaccines, Pfizer-BioNTech and Moderna, are preparing to reformulate their shots if necessary.

As for the economy, tourism spending will likely weaken, as will restaurant spending and shopping at stores. These sectors have already suffered and struggled through the pandemic.

Economists say that Omicron’s economic threat will be less severe than the initial wave of Covid-19 in March 2020 and the Delta variant this summer. In part because each new virus strain has had a diminished economic impact.

In a worst-case scenario, Omicron would bring a return to crippling lockdowns, and halt our economic recovery, plus threaten already compromised supply chains and reduce demand. That would create fears of faster inflation and slower growth.

China says the omicron variant of the coronavirus is a concern for organizers of the Beijing Winter Olympics, but it remains confident the Games will be held as scheduled in February.

It simply is too early to predict what effect Omicron will have on us or our economy. The hope is our preexisting vaccination program will offer us a sufficient degree of protection from severe ramifications. Certain sectors of our economy are already preparing for setbacks. 

We are still not out of the woods when it comes to new COVID-19 variants. Our economy and the global economy are better prepared to deal with setbacks. Yes, Omicron is a concern, as will other potential unborn COVID-19 variants. The road ahead is uncertain at best, but economies are primed for growth. Setbacks are to be expected, but we should remain bullish that Canada’s and the global economy will continue to gain forward momentum.

While a teenager Tony was fortunate to have the opportunity to pursue his love of aviation and began a career began in the airline world during his days in high school and university as he grew up in Toronto. After completing University at Guelph he moved to Ottawa, following a path in urban agriculture and environmental awareness. He shared his insights for over 2 decades as he appeared on TV, and radio, as the "Plant D octor", and operating his own business in horticulture. Later he reentered the transport industry and became involved in the manufacture and marketing of sustainable fuel-saving and safety products for the truck industry. He is director of an African American art collection based in Washington D.C. Today he writes passionately about transportation, sustainability, concerns of our modern-day world, and the intrigue of the human condition.