Broker concerned about omicron
Large brokerage NCB Capital Markets Limited issued a positive short-term outlook for the economy, but cautioned that the new omicron variant of the COVID-19 coronavirus could derail growth.
“On the positive side, doctors have indicated that symptoms of omicron have so far been mild and treatable at home,” said NCB Capital in a note to clients.
“That being said, if this variant along with others spread to key tourism source markets and Jamaica, it could curtail global travel demand, spurring a slowdown in domestic tourism activity. This could weaken Jamaica’s recovery given the importance of the tourism industry to the overall economy,” the brokerage said.
The World Health Organization, WHO, first detected the new variant on November 26. South Africa was the first to report the variant, but new reports suggest omicron was already circulating in Europe at the time.
“Researchers in South Africa and around the world are conducting studies to better understand many aspects of omicron and will continue to share the findings of these studies as they become available,” said WHO in a November 28 update.
NCB Capital said a spike in COVID-19 cases could trigger the reimplementation of more stringent containment measures, another falloff in commercial activity, corporate earnings, market sentiments, and stock market activity. But it also noted that increased vaccination levels would result in less health impacts on the economy. Just over one million Jamaicans have received at least one dose of a COVID-19 vaccine, according to the Ministry of Health.
The Jamaican economy grew 6.3 per cent in the July-September quarter, according to preliminary data from the Planning Institute of Jamaica, and is projected to expand by another 5-8 per cent in the December quarter.
“Prospects for the overall economy in the short term are positive due to the recent easing of previously implemented containment measures, the improved outlook for the tourism sector, and the expected spillover effects on the rest of the economy,” said NCB Capital.