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New strain casts shadow over Putin visit, economic recovery

Tribune News Service

New Delhi, November 27

The rapidly spreading new Covid variant Omicron has raised concerns that it could reverse the shoots of recovery in the Indian economy that was scoring well on the external front with exports poised to touch $400 billion at the end of this fiscal.

The government is in a wait-and-watch mode even as oil prices and global stock markets fell on Friday amid concerns Omicron could dampen economic growth and hit fuel demand.

WTO event cancelled

WTO ministerial conference scheduled in Geneva from Nov 30-Dec 3 cancelled
The new strain may lead to postponement of Russian President Vladimir Putin’s December 6 visit

Anticipating lower demand, Brent oil has already fallen by over 11 per cent and the Covid variant discovered in South Africa dragged down stock markets the world over. There are fears that it would also wreck the diplomatic calendar, which was slowly getting into its groove.

In tandem with the fall in oil prices, commodities such as copper to cotton have also fallen, putting stock markets, a clutch of IPOs next month and even the sale of PSUs, especially Air India, under a cloud.

The Reserve Bank will also be under pressure as it will have to battle a creeping inflation rate as well as continue with flexible monetary policies to counter the expected slowdown.

The fears of the virus spreading have already led to the cancellation of the ’12th Ministerial Conference’ (MC12) of the WTO scheduled in Geneva from November 30 to December 3.

It may even lead to the postponement of the visit of the Russian President Vladimir Putin who along with his Foreign and Defence Ministers is poised to venture out of his country for only the second time since the virus broke out last year. Putin is scheduled to visit India and officials were not willing to hazard a guess about the prospects of a meeting with PM Modi on December 6.

A meeting of ‘OPEC +’, the Saudi-Russia led cartel of oil producers, on December 2 will provide indications where global trade and travel is headed in the wake of the new strain.

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