Omicron, though, threatens to expose some serious flaws in that plan. The variant is much more transmissible than others, making it difficult to contain. And as the rest of the world learns to live with the virus, economists say China’s zero-tolerance strategy is likely to do more bad then good in 2022.
Goldman Sachs, for example, has just slashed its projection for Chinese economic growth in 2022 to 4.3% from 4.8%. That’s roughly half what they estimate last year’s growth rate to be. (China will report fourth quarter and full year GDP figures for 2021 on Monday.)
Those revisions come “in light of the latest Covid developments — in particular, the likely higher average level of restriction (and thus economic cost) to contain the more infectious Omicron variant,” Goldman analysts wrote in a research note Tuesday.
Morgan Stanley is taking a similar view that Omicron could mean the costs of a zero-Covid approach outweigh the benefits. Last week its analysts forecast growth of 4.9% in the first quarter, but suspect it could slow to 4.2% “should Omicron spread to other regions and lead to multiple city-wide lockdowns.”
Source : cnn
