New waves of COVID-19 infections and new strains of the virus dampened business optimism in January 2021, analysis of the responses to an ongoing poll by Verdict showed.

Verdict has been conducting the poll to study the change in business optimism during COVID-19 as reflected by the views of companies on their future growth prospects amid the pandemic.

Analysis of the poll responses recorded in January shows that optimism regarding future growth prospects declined by nearly two percentage points, from 59.9% in December to 58% in January.

Business optimism - JanuaryWhile the percentage of respondents who were optimistic about growth prospects remained unchanged between December and January at 23%, the percentage of respondents who were very optimistic declined from 37% in December to 35% in January 2021.

The percentage of respondents who were pessimistic during January declined by one percentage point from December, to 10%, while that of the very pessimistic increased from 14% in December to 16% in January.

Further, the percentage of respondents who were neither optimistic nor pessimistic was 16% during the month, compared to 15% in December.

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The analysis is based on 1,480 responses received from the readers of Verdict network sites between 01 January and 31 January.

New viral strains and waves of infection offset recovery hopes from vaccination

Although vaccination drove hopes for a turnaround in December, new waves of infections and emergence of new variants of the virus dampened economic outlook in January. Business optimism among small business owners in the US recorded the steepest decline to an eight-month low. The National Federation of Independent Business index of sentiment fell by 0.5 points to 95.

The International Monetary Fund (IMF) has projected the global economy to grow by 5.5% in 2021, an increase of 0.3% from October projections, but warned that new COVID variants could pose a risk. The strength of the global economic recovery will depend on vaccinations, policy support, and exposure to foreign markets, the IMF noted.

The IMF has also noted that multi-lateral co-operation is essential to bring the pandemic under control. It includes vaccine access for all countries and access to therapeutics at affordable cost.