Goldman Sachs Saturday cut his gaze from Economic growth from United State By 2022, citing the risks and uncertainties surrounding the emergence of the omicron variant of the coronavirus.
Goldman economist Joseph Briggs said in a note that Omicron could slow the reopening of the economy, although the company expects a “modest drag” on services spending.
The company now expects 3.8% GDP growth in 2022, down from the previous 4.2% year-over-year, and 2.9% growth between the last two quarters, down from 3.3% above, Briggs said.
“While many questions remain unanswered, we now believe that it is most likely a mild negative scenario in which the virus spreads more quickly, but immunity to severe disease is slightly weakened,” he said.
The labor shortage could last longer if people are uncomfortable returning to work due to the variance, according to the note.
Goldman noted that the spread of the virus could exacerbate supply shortages if other countries impose tighter restrictions, although increased vaccination rates among foreign trading partners would avoid serious disruptions.
Goldman Sachs’ forecast for the United States comes after International Monetary Fund Managing Director Kristalina Georgieva said on Friday that its estimates of global economic growth are likely to be lowered by Omicron.