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Omicron discovery could delay economic recovery
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Invisible threat: Passengers wait to board an intercity train at Senen Station in Central Jakarta as they head to their hometowns in eastern Java ahead of New Year’s Eve 2020. (JP/Leo)
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fter reporting the country's first known case of the Omicron variant of the coronavirus, the government has declared its readiness to retighten curbs if necessary, a move that would likely slow down — but not halt — the nation's economic recovery.
Coordinating ministers said last week that the government would tighten public mobility restrictions (PPKM) should a spike in COVID-19 cases overwhelm the healthcare system, and that this would have knock-on effects on economic activity.
Economists have long warned of such an eventuality, but the odds have risen, as the Health Ministry announced on Thursday Indonesia’s first confirmed case of Omicron, a variant that seems to be more transmissible but less deadly than its predecessors.
“The development of the Omicron variant will be the key to economic recovery in 2022. If Omicron were to result in significant hospitalization and the current vaccines were to lose their potency, the recovery would be slower than expected," Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said on Thursday.
New studies have found that COVID-19 vaccines appear to offer significantly less protection against the Omicron variant but that a booster dose restores much of the protection.
Economists generally expect Omicron’s economic impact on Indonesia to be nowhere near as bad as the previous two waves, citing the country's room for emergency response measures and its preparedness after dealing with previous waves.
But they also say that tightened PPKM would weaken consumer spending and that things could worsen depending on what medical experts learn about the new variant and how other governments respond over the coming months.
