Economic Predictions for 2022 and The Omicron Effect on Forecasts


After the year of Shock and Awe, what’s in store for 2022 for industries and economies worldwide? Will 2022 be better or will fear over the Omicron variant of the Corona Virus continue to exert downward pressure on growth?

And what are the economic predictions for 2022 and are there any areas where there is optimism? The situation is changing with alarming alacrity. It was only on Saturday that Goldman Sachs cut its previous forecast of 4.2% economic growth down to 3.8%.

Economist Joseph Briggs said that the Omicron variant could slow economic reopening but at the same time, they only expect the economic effect to be a modest drag rather than a full-on emergency stop.

Labor market

The labor market is expected to carry on being a relatively good news story even if a little more muted due to Covid 19. November figures show that unemployment has fallen to a pandemic low with a rate of 4.2%. America’s labor force participation rose to 61.8% — the highest it has been since March 2020. Job gains total more than six million.

Elise Gould of the Economic Policy Institute says she is confident that those figures mean the economy will be well on track for a full recovery by the end of 2022.

However, worker shortages could persist if people do not feel comfortable returning to work, according to Goldman Sachs. Where people work in close proximity to each other, there were outbreaks of Delta variant earlier this year. This led to supply-chain turmoil seeing factories in Asia closing down. The areas that have seen significant disruption include the supply of computer chips that are fundamental to so many other areas of manufacturing.

The Goldman Sachs report also noted that these disruptions will hopefully be mitigated by vaccination, as long as there was an increase in vaccination rates among foreign trade partners.

Goldman Sachs CEO David Solomon
Goldman Sachs CEO David Solomon

Technology

Essentially, we are still in uncharted waters and there are many factors that could blow the recovery off course. The pandemic changed the way in which people work. Those whose employment allows them to work remotely will continue to see significant developments in the way in which technology will change their working life. The shift away from full-time office work to a more blended approach to employment will almost certainly continue in 2022.

Growth

There are some industries that have actually thrived during the pandemic including online shopping and gambling. Now that people are accustomed to the changes they have made, these sectors will continue to be major players in 2022.

Online shopping was already firmly established before March 2020 and has continued to go from strength to strength. The online gambling industry has also seen significant uptake over the last 18 months. Changes to both regulations and the amount of time people had, have seen more people trying out online gambling than ever before.

These gambling stats show that online participation is likely to be a trend rather than a blip. The companies who operate the licenses for online Sportsbook, Casino, Slots, and Social Casino are looking forward to continued growth in 2022.

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