The International Monetary Fund on Monday warned developing countries of uncertainties in their economies due to the spread of the Omicron variant of coronavirus.
In a blog post, IMF economists Stephan Danninger, Kenneth Kang and Helene Poirson flagged risks to economic growth in developing countries due to the “stubbornly resurgent pandemic”.
The highly transmissible Omicron variant has led to a huge surge in infections across the world. The daily average of global cases went past the 20 lakh-mark between January 1 and January 7, according to AFP. The average daily infections of 21,06,118 was recorded just days after more than 10 lakh cases were recorded across the world between December 23 and December 29.
Last week, the World Health Organization warned that the Omicron variant should not be categorised as “mild”, even as it appears to be less severe than the Delta strain of the disease.
In their blog post on Monday, the IMF economists said that apart from concerns regarding the Omicron variant, indications from the United States Federal Reserve that the country’s key interest rates might be hiked. Higher interest rates mean financing costs for some emerging economies with dollar-denominated debt will rise.
“Given the risk [due to Omicron] that this could coincide with faster Fed tightening, emerging economies should prepare for potential bouts of economic turbulence,” the economists said.