The spread of the Delta variant of COVID-19 cases poses key risks to the global and U.S. economic recovery, according to a recent survey.
An IHS Markit survey of American businesses reported Friday that the U.S. can expect to see an ease in economic growth due to supply strains, a worker shortage and the effects of the Delta variant.
The report noted that the Delta variant played a part in weighing on June factory output, particularly “in various emerging Asian economies.”
“The Delta variant poses a major risk to the outlook,” said Chris Williamson, the chief business economist at IHS Markit.
“Not only have rising case numbers led to a slide in business optimism to the lowest since February, further Covid waves around the world could lead to further global supply-chain delays,” he said.
Concerns about the pandemic have been rising, but the U.S. has seen improved economic growth. There are concerns that the U.S. economy will soon take a hit after the GDP accelerates to 9.2% for the second quarter.
In May, IMF Managing Director Kristalina Georgieva told David Ignatius of the Washington Post that it is important for the U.S. to see a strong recovery.
“High growth rates in the United States is a global public good. It has a positive spillover especially to economies that are more integrated with this of the United States. It is creating a possibility of prices to go up and let me explain the factors that are driving prices up and why at the IMF, we are in the camp of those who think these are transitory factors,” she said.
She also noted that there is $9 trillion at stake in getting the world vaccinated for a real recovery between now and 2025.
Georgieva said there is a global imbalance in the recovery.
“It is very clear that we are faced with a dangerous divergence of economic fortunes. A group of advanced economists in some emerging markets are chartering a strong recovery, and the rest of the world is falling behind,” she said.
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