Global Views: Earlier Runoff, Four Hikes

When the first reports about the Omicron variant emerged from South Africa in November, Goldman Sachs Research cut their global GDP forecast moderately on the assumption that its economic impact would resemble that of the Delta variant earlier in the year. On balance, this still looks about right, as Omicron is even more transmissible than we had expected but also less severe. Moreover, both confirmed cases and hospital admissions are now on a downward trend not only in South Africa but also in London, the first place in the Northern Hemisphere to see a major outbreak. If this pattern holds up elsewhere, the economic impact should be largely behind us by the end of Q1, at least in the advanced economies.