The Omicron variant has taken a toll on global business sentiment, with executives worried about the resurgence of the virus and its debilitating impact on supply-chain issues.
According to a new Oxford Economics survey, a majority of respondents have become more negative on the month, for the first time since the height of the epidemic. Supply-chain concerns have also increased. The survey of 120 businesses, including some of the world's largest companies, found the C-suite in knots over the new Omicron coronaviruses variant, shortly after the emergence of the new Omicron coronaviruses variant.
A majority of businesses view risks as the upside, up from 50 per cent in October s quarterly survey or heavily to the downside 2 per cent, down from 7 per cent. Only a relatively small proportion of businesses 12 per cent see risks as to the upside, according to Oxford Economics.
The International Monetary Fund's managing director, Kristalina Georgieva, said there was a sentiment about the possibility of a slowing of global growth next year. In October, the IMF forecast the global economy to grow 5.9 per cent in 2021 before easing to 4.9 per cent in 2022 - now that forecast could be lowered further.
A Bloomberg study shows that a more deadly variant would be a drag on the global economy, with even a three-month return to the toughest 2021 restrictions putting growth back to 4.2 per cent in 2022, a move that is a pullback from its earlier projection of 4.7 per cent GDP growth.
According to Oxford Economics, inflation is another concern that business executives are worried about.
Around 62 per cent of the executives believe inflation will peak around the first or second quarter of 2022, but 18 per cent believe that high inflation will remain an issue well into the second half of next year.
Supply-chain snarls are a headache, especially if new variants slow down recovery and disrupt freight and passenger movement.
Businesses attach a high weight to downside scenarios, such as a 1 in 5 chance of weaker global growth in 2022 and a similar likelihood of a long Covid scenario in which new virus variants can lead to a long period of public health restrictions, according to the Oxford survey.