Omicron May Affect Australia’s Economic Recovery

The new omicron virus strain could lead to some major setbacks for Australia’s economic recovery after undergoing several lockdowns according to the Royal Bank of Canada RBC.

Su-Lin Ong, head of Australian economic and fixed-income strategy at RBC said, “Given the delta experience, we would expect policy makers to assume the worst, move quickly, and take an overly cautious approach. A delay of further easing in restriction and or additional measures will be inevitable if omicron moves quickly in Australia.”

With growing fears of the spreading omicron variant, global markets were rattled and saw major drops. The virus strain could mean a return to lockdowns and closures of borders. Yields on Australian three-year government bonds saw a decline of 0.85% on Monday. Traders are cautiously waiting for upcoming policy announcements made by the Reserve Bank. The Reserve Bank is expected to hold a meeting on the 7th of December.