Goldman Sachs cuts U.S. GDP growth forecast for 2022 on omicron fears

FILE PHOTO: Workers needed sign at a hostel in Brandon, Florida, USA.

© Reuters/Octavio Jones
FILE PHOTO: Workers needed sign at a hostel in Brandon, Florida, USA.

Dec 4 (Reuters) – Goldman Sachs cut its 2022 U.S. economic growth outlook to 3.8% on Saturday, citing risks and uncertainty surrounding the emergence of the omicron variant of the coronavirus.

Goldman economist Joseph Briggs said in a note that omicron could slow the economic reopening, although the firm expects “only a modest drag” on spending on services.

The firm now expects 3.8% growth in Gross Domestic Product (GDP) in 2022, down from 4.2% previously on a full annual basis, and 2.9% growth between the last two fourth quarters. , down from 3.3% previously, Briggs said.

“While many questions remain unanswered, we now believe that it is most likely a moderate downside scenario in which the virus spreads more rapidly but immunity to severe disease only weakens slightly,” he said.

The worker shortage could last longer if people are not comfortable returning to work because of the variance, according to the note.

Goldman noted that the spread of the virus could worsen supply shortages if other countries implement stricter restrictions, although increasing 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 Friday that her estimates of global economic growth are likely to be lowered due to omicron.

(Report by Jahnavi Nidumolu in Bangalore; edited in Spanish by Carlos Serrano)

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