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  • Rovindu Ambagolla

Monday Market Musings >>> Omicron– The New Covid Strain and its Potential to Wreck the World Economy

Picture Credit: Fusion Medical Animation

The new Covid strain which was named “Omicron” was issued as “a variant of concern” by the World Health Organisation last week. The first case of the new strain was detected on the 9th of November in South Africa and now the number of Omicron cases is rising rapidly in every province of the country.

Scientists are now vigorously testing the new strain to gain insight on just how transmissible the Omicron variant is, as speculation grows between experts about the dangers this new variant poses. Dr. Ashish Jha, dean of the Brown University School of Public Health commented, “We have seen a lot of variants pop up over the last five, six months, and most of them have not amounted to much. This looks different…It's acting differently, it looks like it's much more contagious than even the Delta variant”. The testing process could take two-to-eight weeks to fully understand if the Omicron variant is more contagious than the Delta variant and how effective the current vaccines are against Omicron.

Meanwhile amongst the wait, global markets face another round of uncertainty. Investors are already boycotting riskier investment options such as stocks. “At a minimum, volatility will be higher in the next two weeks” commented Peter Berezin, Chief Global Strategist at BCA Research Inc. Global shares have decreased to the lowest levels since mid-October and even the value of Bitcoin shrank by 20%.

South Africa is already facing the consequences of the new outbreak. Many countries have banned flights to South Africa in an attempt to curb the spread of the new variant, but this international travel ban spells disaster for the country’s economy. South African President Cyril Ramaphosa called on the international community to urgently reverse the travel bans imposed on the country, but as cases of the new variant has been detected in Australia, Netherlands, Denmark, Canada and the UK, international travel restrictions are likely to get tighter once again, further straining the already weak global economy.

November 29th 2021 | 2:35 PM

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