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PARIS — The world economy woke up from its pandemic-induced coma in 2021, but between the Omicron variant causing renewed disruptions and persistent inflation pushing central banks to pump the brakes, the outlook is uncertain.

Here is a look at the state of the global economy:

Uneven recovery 

Countries have posted impressive growth figures as they clawed their way out of the depths of the 2020 COVID-induced recession, but some are faring better than others as wealthier countries have had better access to vaccines.

The United States has overcome its worst downturn since the Great Depression while the eurozone's economy could return to pre-pandemic levels by the end of the year.

But the rapid spread of the Omicron variant has prompted many countries to reimpose restrictions that are likely to hurt the travel and leisure sectors first and foremost.

With a single-digit vaccination rate, the economy of sub-Saharan Africa will grow at a slower click, according to the International Monetary Fund (IMF).

Most emerging and developing countries should remain far behind their pre-pandemic forecasts by 2024, the IMF says.

Central banks in Brazil, Russia and South Korea have raised interest rates to combat rising inflation, a move that could rein in growth.

China, the world's second-biggest economy and a driver of global growth, is facing a slew of risks: New coronavirus cases, an energy crunch and fears over the debt crisis at real estate giant Evergrande.

Inflation soars 

Inflation has accelerated to multi-year highs around the world, as consumers returned with a vengeance and industries faced shortages.

Prices have soared across the board, with oil, natural gas and raw materials such as wood, copper and steel going through the roof.

"The biggest surprise of 2021 has been the goods-led inflation surge," Goldman Sachs analysts wrote in a 2022 outlook.

Central banks insisted for months that the inflationary pressure is a temporary consequence of economic activity returning to normal this year after it came to a halt when the pandemic erupted in 2020.

That changed in December, and the US Fed is now moving to quickly halt its pandemic support measures and expects to raise interest rates twice in 2022. 

Stock markets have hit new record highs this year, and were overall reassured central banks are shifting to focus on keeping a lid on inflation.

"The question is whether we really are at the end of the crisis," said Roel Beetsma professor of macroeconomics at the University of Amsterdam.

The IMF still forecasts 4.9 per cent growth next year.

Widespread shortages 

Industries have struggled to keep up with a surge in demand from consumers.

Global trade has been disrupted by insufficient shipping containers, congestion at ports and labour shortages.

One key component that is hard to come by these days is semiconductors, chips used in everything from phones to video game consoles to the electronic systems of cars.

The shortage has been so bad that several automakers have had to temporarily halt production at some factories.

Labour shortages have added to the problem as truck drivers, port workers and cashiers have not returned to work following lockdowns.

Despite the difficulties, the IMF expects the world economy to grow by a healthy 4.9 per cent next year.

Climate change 

In addition to the pandemic, economies had to come to grips with another life-threatening event this year: climate change.

The conflict between economic growth and saving the planet came to the fore at the COP26 climate summit in Glasgow, Scotland, this month.

Nearly 200 countries signed a deal to try to halt runaway global warming after two weeks of painful negotiations, but fell short of what scientists say is needed to contain dangerous rises.

Droughts and other climate catastrophes threaten to further drive up food prices, which stood at a 10-year high in November, according to the Food and Agriculture Organisation 

Wheat has soared by 40 per cent in the past year while dairy products are up 15 per cent and vegetable oils reach new records.

"It's pretty obvious. Everything has gone up," said Nabiha Abid, a resident of Tunisia's capital, noting that the price of meat has doubled.

NEW YORK — Global travel chaos that convulsed the Christmas weekend spilled into Monday with major flight cancellations impacting millions returning from holiday break, as COVID-19 cases surge to record levels in Europe and half a dozen US states.

Some 11,000 flights have been scrapped worldwide since Friday, and tens of thousands more delayed, during one of the year's busiest travel periods — with multiple airlines saying spikes in cases of the Omicron variant have caused staffing shortages.

Effects rippled worldwide, with about 2,500 flights already cancelled on Monday and 800 more on Tuesday, according to flight tracker FlightAware.

The highly transmissible Omicron strain has sent cases skyrocketing, once again disrupting lives and a global economy battered by almost two years of the pandemic — with England's Premier League the latest to announce that a record 103 players and staff had tested positive in the past week.

As several countries revive unpopular lockdowns, France's President Emmanuel Macron was set to announce new measures to combat the surge after nationwide infections hit record-high figures — in line with Denmark and Iceland which also reported record daily cases.

Governments worldwide are scrambling to boost vaccination — stressing that the overwhelming majority of hospitalisations and deaths are occurring among the unvaccinated.

But in the United States, cases are already on track to reach record highs in January, fueled by large pockets of unvaccinated residents as well as lack of access to quick and easy testing.

President Joe Biden said on Monday some US hospitals could be "overrun", but that the country is generally well prepared to meet the latest surge and Americans needn't "panic".

In a virtual meeting hosted by the White House with a couple dozen state governors and top health advisers, Biden stressed that the rapid spread of the Omicron variant would not have the same impact as the initial outbreak of COVID-19 a year ago or the Delta surge this year.

"Omicron is a source of concern, but it should not be a source of panic," he said.

Biden's administration has vowed to ramp up the availability of tests in coming weeks — and the president repeated that pledge on Monday.

US states including Delaware, Hawaii, Massachusetts, New Jersey and New York, as well as the island territory of Puerto Rico, have reported more coronavirus cases in the past seven days that at any other point in the pandemic, according to data compiled by The New York Times.

"Clearly we're on a vertical climb right up," top White House pandemic adviser Anthony Fauci told National Public Radio on Monday, addressing the Times data.

Nationwide, the United States is closing in on the daily high of 250,000 cases recorded last January in the world's most affected nation, which has lost more than 816,000 people to the pandemic.

New York's health department said COVID pediatric hospitalisations have risen four-fold over the past two weeks as Omicron took hold.

In Florida — a global hub for the cruise industry, where new cases quadrupled in the week to December 23 — authorities are monitoring dozens of ships after at least two vessels recorded COVID outbreaks.

Brenda Hammer, who was set to board the Odyssey of the Seas, a Royal Caribbean cruise ship, said:"I'm a little nervous about it. I wasn't sure I still wanted to come."

Earlier this week, 55 people on the ship tested positive for COVID, despite 95 per cent of people on board being vaccinated, the company said.

China strategy 

tested 

Thousands of the weekend's flight cancellations were linked to Chinese carriers, many of them flights going in and out of Xi'an, where authorities are scrambling to contain the country's worst COVID outbreak in 21 months.

Desperate to keep a lid on the pandemic before February's Beijing Winter Olympics, China has stuck to a "zero-COVID" strategy, involving tight border restrictions, lengthy quarantines and targeted lockdowns. But there have been sporadic flare-ups.

Some 13 million residents are already confined to their homes in Xi'an, where COVID controls were tightened on Monday to the "strictest" level, banning residents from driving.

Two other Chinese cities also reported a case linked to Xi'an, as authorities urged migrant workers not to travel home in the upcoming Lunar New Year holiday.

NEW YORK — Travel headaches abound for millions worldwide on the holiday weekend with 2,200 flights cancelled on Sunday alone, tracking websites reported, as celebrants wrap up Christmas battered by COVID's Omicron variant.

Some 7,500 flights have been grounded and tens of thousands more delayed from Friday through Sunday — one of the busiest travel periods of the year — with multiple airlines acknowledging that rising cases of Omicron have prompted staffing shortages.

Effects have rippled worldwide, and the hurt was expected to bleed into the work week, with at least 735 flights already facing cancellations on Monday and 160 more on Tuesday, according to flight tracker FlightAware.

The highly transmissible Omicron strain has sent new cases soaring across the globe, with countries reviving dreaded lockdowns, major sports leagues cancelling Boxing Day football and rugby fixtures and governments including the United States scrambling to boost testing and vaccinations.

In China's Xi'an city, 13 million residents were confined to their homes Sunday amid tightened restrictions as the country recorded its biggest COVID-19 infection numbers in 21 months.

Desperate to keep a lid on outbreaks before February's Beijing Winter Olympics, China has implemented a vigilant "zero-COVID" strategy involving tight border restrictions, lengthy quarantines and targeted lockdowns. But there have been sporadic flare-ups.

In the United States on Sunday top pandemic advisor Anthony Fauci warned of a COVID "testing problem" as the virus overwhelms the nation and he vowed to make more tests available next month.

"There are still some issues now of people having trouble getting tested," Fauci told ABC Sunday talk show "This Week". 

"But we're addressing the testing problem, he added, saying it should be corrected "very soon."

Severe weather has compounded the travel chaos in the United States, with storms battering the country's west, though they brought a white Christmas weekend to Seattle and parts of California.

But air travel remained a global headache. 

Aircrew and ground staff have fallen sick or gone into quarantine after exposure to COVID, multiple airlines acknowledged. 

Lufthansa, Delta, United Airlines, JetBlue, British Airways, Alaska Airlines and several others have been forced to cancel flights.

"We entered the holiday season with the highest staffing levels we've had since the pandemic began and are using all resources available to us to cover our staffing needs," JetBlue said in a statement.

"Despite our best efforts, we've had to cancel a number of flights, and additional flight cancellations and other delays remain a possibility as we see more omicron community spread."

Frustrations 

Chinese carriers, notably China Eastern and Air China, have scrubbed more than 2,000 flights over the long weekend, including many going in and out of Xi'an Xianyang International airport, according to tracker data. 

Flightaware.com reports nearly 2,900 flights were canceled worldwide on Saturday, and 2,250 and counting on Sunday, with 720 of those within, originating from or headed to US airports. Some 7,200 Boxing Day flights have been delayed. 

The cancellations added to the frustration for many people eager to reunite with their families over the holidays after last year's Christmas was severely curtailed.

The American Automobile Association estimated more than 109 million Americans would travel by plane, train or automobile between December 23 and January 2, a 34 per cent increase over the last year.

But most of those plans were made before the detection of Omicron, which has become the dominant strain in the United States, overwhelming hospitals and healthcare workers.

US authorities have recorded an average of over 175,000 new daily cases over the recent period, the Centres for Disease Control and Prevention reported.

MILAN — Italy has ticked all the necessary boxes to receive the next installment of EU recovery funds from Brussels, said Mario Draghi, Italy’s prime minister.

Rome "has achieved all 51 targets" needed to qualify for the next tranche of nearly 200 billion euros ($177 billion) allocated to Italy as part of the EU's post-virus fund, he said at a press conference on Wednesday.

Brussels has demanded reforms in return for the grants and loans.

Draghi, who has been driving such reforms through parliament in record time, said Rome intended to "radically reform the economy and stimulate productivity, simplify bureaucracy and encourage innovation".

Rome received its first check in August for 24.9 billion euros from the European Commission -- 13 per cent of the total funds expected from Brussels over six years.

Reforms demanded by the European Commission and adopted by Italy include an overhaul of the justice system, one of the least efficient in Europe, and a reform aimed at regularising real estate.

NEW YORK — US officials are probing whether Tesla's "passenger play" videogame function could lead to crashes, according to an online posting on Wednesday by a federal safety agency.

The feature, available on an estimated 580,000 Tesla models from 2017 through 2022, "allows the gameplay to function on the front centre touchscreen while the vehicle is in motion and may present a distraction to the driver", according to the National Highway Traffic and Safety Administration (NHTSA).

Questions about the videogame function follow earlier NHTSA probes of systems at Elon Musks' electric vehicle company centered on the controversial "Autopilot" driver-assistance programme. 

NHTSA said it has confirmed that the gaming function has been available since December 2020 in many Tesla vehicles, after only being enabled in park mode on earlier autos.

The investigation will question whether a function intended for use by a front seat passenger "may distract the driver and increase the risk of a crash", NHTSA said.

NHTSA undertook the probe following a customer complaint earlier this year.

"Why is a manufacturer allowed to create an inherently distracting live video which takes over two-thirds of the screen which the driver relies on for all vehicle information?" said a complaint from Lake Oswego, Oregon.

"NHTSA needs to prohibit all live video in the front seat and all live interactive web browsing while the car is in motion. Creating a dangerous distraction for the driver is recklessly negligent."

Despite various controversies, shares of Tesla have soared over the last two years, making Musk the world's richest person, according to Forbes.

ISTANBUL — Turkey's lira strengthened on Tuesday, after a wild start to the week saw its value swing by 30 percentage points, in response to President Recep Tayyip Erdogan's emergency economic support measures.

The Turkish leader stunned markets and his political opponents on Monday by effectively tying the value of some lira bank deposits to the dollar.

Economists and many Turks were still trying to understand how this new exchange mechanism will work or where the government will get the money to pay for it.

But the impact on the lira — which had lost 45 per cent against the greenback from November 1 to late Monday afternoon — was monumental.

It was trading down 10 per cent on the day by the time Erdogan appeared on national television to announce his new economic proposals after a weekly cabinet meeting.

It was trading up 20 per cent on the day a few hours after Erdogan had finished.

"We finally understood that the Erdogan administration cares about the exchange rate and has avoided capital controls," Economist Timothy Ash of BlueBay Asset Management said in a note to clients.

"Erdogan affirmed that he believes in markets, albeit not interest rates."

Indirect rate hike 

Erdogan holds the unconventional belief that high interest rates cause inflation, rather than tamping it down by slowing economic activity.

He has pushed the central bank to slash its policy rate, so far below the annual rate of price increases — now at 21 per cent and rapidly climbing.

This meant that Turks who put liras in their bank accounts were effectively losing money each month.

Economists feared that Turkey could see a potentially paralysing run on the banks unless something was done quickly.

Erdogan's new policy — dubbed an "indirect interest rate hike" by former treasury adviser Mahfi Egilmez — is meant to defend the value of lira holdings against fluctuations in the exchange rate.

It guarantees that the government will cover any depreciation of lira bank deposits against the dollar through periodic payments.

"If the exchange rate increases by 40 per cent and the interest rate increases by 14 per cent, 26 percentage points will be paid in compensation," Egilmez explained on Twitter.

The policy is designed to manage inflation expectations and make Turks feel safer about their lira assets.

The lira gained a further 22 per cent early Tuesday. It then erased all those gains before climbing back up six per cent by Tuesday afternoon.

Yet, many economists question whether Erdogan's new approach is sustainable.

"The deposit guarantee method will increase the public burden," former Turkish economy minister Ali Babacan told reporters.

"The treasury will pay for it with taxes. This is the dollarisation of the country's economy."

Economists also expressed doubts about whether the move could truly protect Turks from rapid cost of living increases.

"This is still bad policy," Ash said.

"This scheme likely has bought time and avoided an immediate crash in the banking sector but it has done nothing to fight inflation."

NEW YORK — Tech giant Oracle will buy Cerner, which makes software that hospitals use for digital recordkeeping, for $28.3 billion, the companies announced on Monday.

"Working together, Cerner and Oracle have the capacity to transform healthcare delivery by providing medical professionals with better information — enabling them to make better treatment decisions resulting in better patient outcomes," Oracle's Chairman and Chief Technology Officer Larry Ellison said in a statement.

The deal is Oracle's "largest-ever" acquisition, and according to the statement will see the company pay $95 in cash for each share of Cerner, with an expected closing date of the end of next year.

Cerner will be a "huge additional revenue growth engine for Oracle for years to come as Oracle expands Cerner's business into many more countries throughout the world", the statement said.

Oracle is one of the US tech industry's largest firms, and is worth nearly $260 billion on Wall Street.

Its purchase of Cerner will "provide our overworked medical professionals with a new generation of easier-to-use digital tools that enable access to information via a hands-free voice interface to secure cloud applications", Ellison said.

Founded in 1979, Cerner makes software to help doctors and nurses keep track of patients' records at more than 27,500 hospitals and clinics worldwide.

The company is based in Kansas City, Missouri, and has more than 28,000 employees.

GENEVA — The World Economic Forum (WEF) said on Monday it "will defer its annual meeting in Davos... in the light of continued uncertainty over the Omicron" variant of coronavirus.

The "high-powered" meeting scheduled for January 17-21, which usually draws leading figures from business, politics and diplomacy, will instead be held in "early summer", the organisers said.

Last year's edition was cancelled because of the pandemic and Swiss authorities have recently stepped up health restrictions sharply to control a fifth coronavirus wave.

"Despite the meeting's stringent health protocols, the transmissibility of Omicron and its impact on travel and mobility have made deferral necessary," the WEF said.

The body will instead organise online "State of the World" sessions to get global leaders talking.

Forum chief Klaus Schwab promised "continued digital convening of leaders from business, government and civil society".

"We look forward to bringing leaders together in person soon," he added.

The Davos meeting in January 2021, held virtually because of the pandemic, came at the height of wrangles over vaccine distribution between wealthy and worse-off countries and the manufacturers.