As we have seen the coronavirus pandemic getting improved, the news of the emergence of a covid-19 variant, labeled Omicron, has sparked a wave of selling in the financial sectors. It seems that a new highly transmissible strain of the virus could set back economic recoveries globally. Yet if Omicron proves manageable, 2022 will presumably be an economically trying one, as countries are squeezed between two redoubtable profitable forces tighter American financial policy, and slower growth in China.
At current exchange rates, America and China account for 40% of global GDP, but they influence other economies in different ways. For many emerging countries, strong growth in America is a double-edged sword.
According to the global media outlet reports, the world has discovered three threats to the global economic recovery just after the eruption of the Omicron.
The expansionary effect of its households’ spending is often overshadowed by the effect of its monetary policy, given the critical role of the dollar and Treasury bonds in the global financial system.