Mark Zandi of Moody’s plans to dim his US economic forecast after Omicron concerns
“With Omicron looming and DC in disarray, risks to the economic recovery next year are not inconsequential and are rising,” Zandi, the chief economist at Moody’s Analytics, told CNN on Monday.
Moody’s is currently predicting GDP growth of 4.4% in 2022, but Zandi said that forecast will be cut by as much as one percentage point.
“Right now, it does feel like this Covid wave is bigger and more serious than I thought it would be just a few weeks ago,” Zandi said, pointing to the rapid spread in Europe, especially the United Kingdom.
Even though symptoms from Omicron may be less severe, resulting in lower hospitalizations and deaths, Zandi worries the caseloads will be so high that “hospital systems could be overwhelmed.”
“Once that happens, that disrupts business,” Zandi said. “Governments have to start shutting businesses down or reimposing social distancing rules and restrictions on travel. Things that make it more disruptive to the economy.”
Meanwhile, Manchin, the West Virginia Democrat, set off a political shockwave on Sunday by announcing his opposition to Build Back Better — President Joe Biden’s signature legislation.
Zandi said that is a major factor behind his gloomier economic view as well.
“Even if we get some form of Build Back Better, it’s going to be diminished from what was on the table,” Zandi said. “It’s just not going to provide the same support in the near-term or long-term.”
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