Goldman Sachs lowers US GDP growth forecast for 2022 over fears from Omicron

December 4 (Reuters) – Goldman Sachs on Saturday lowered its outlook for US economic growth to 3.8% for 2022, citing risks and uncertainties related to the emergence of the Omicron variant of the coronavirus.

Goldman economist Joseph Briggs said in a note that the Omicron variant could slow economic reopening, but the company expects “only a modest detriment” to service spending.

The company now sees gross domestic product (GDP) growth of 3.8% in 2022, up from 4.2% previously on a full-year basis, and growth of 2.9% in Q4 / Q4 from 3.3% previously, said Briggs.

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“While many questions remain unanswered, we now believe a moderate downside scenario is likely, in which the virus spreads faster but immunity to serious diseases is only marginally weakened,” he said.

The labor shortage could last longer if people do not feel comfortable returning to work because of the variant, the note says.

Goldman suggested that the spread of the virus could worsen supply shortages should other countries introduce stricter restrictions, but increasing vaccination rates with foreign trade partners would prevent serious disruptions.

Goldman Sachs’ U.S. forecast comes after International Monetary Fund executive director Kristalina Georgieva said Friday that the lender would likely lower its estimates for global economic growth due to the new Omicron variant of the coronavirus. Continue reading

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Reporting by Jahnavi Nidumolu in Bengaluru Editing by Alistair Bell

Our Standards: The Thomson Reuters Trust Principles.

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