A prominent economist expects the Australian economy will suffer a brief setback from the impact of the COVID-19 Omicron variant, which has already put a dent in consumer confidence and caused a slip in demand for workers.
The World Bank has downgraded its global economic forecasts, saying the rapid spread of the Omicron strain indicates the pandemic is likely to continue to disrupt economic activity in the near term.
AMP Capital chief economist Shane Oliver has also revised down his growth forecast for Australia in the March quarter to 0.6 per cent from one per cent, although he has revised up subsequent quarters.
"Global growth is likely to slow this year... with Australian growth of around four per cent, despite the Omicron wave resulting in a brief set back in the March quarter," Dr Oliver said.
The World Bank's latest Global Economic Prospects report predicts a marked deceleration in world growth from 5.5 per cent in 2021 to 4.1 per cent in 2022 and 3.2 per cent in 2023, as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.
"The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory," World Bank Group President David Malpass said.
Prime Minister Scott Minister held emergency talks with key ministers and industry leaders ahead of Thursday's national cabinet faced with deepening supply chain disruptions.
"With so many cases appearing every day, and that expected to continue until its peak, this will have an obvious impact right across our supply chains," Mr Morrison said ahead of the meeting.
"With so many people getting COVID, that is clearly going to take more and more people out of the workforce."
New figures showed there were further signs the strong demand for workers seen in the latter stages of 2021 is coming off the boil.
The Australian Bureau of Statistics said there were 396,100 job vacancies in November, 18.5 per cent more than in August last year.
ABS head of labour statistics Bjorn Jarvis said vacancies continue to reach record highs.
"These figures continue to show the high demand for workers from businesses emerging from lockdowns, together with ongoing labour shortages, particularly in lower paying industries," Mr Jarvis said.
However, preliminary - and more up to date - figures from the National Skills Commission show job advertisements on the internet fell 2.5 per cent in December.
"This is the first decline in recruitment activity following the recovery from the impact of the COVID-19 Delta outbreak observed over the previous three months," the commission said.
Even so, online job ads were 37.4 per cent higher than a year earlier.
ANZ's job advertising series released earlier this month fell 5.5 per cent in December.
Confidence has also declined due to uncertainty over the outlook, with tens of thousands of Australians being infected daily by the Omicron variant and causing a spike in virus-related deaths.
"We are seeing businesses forced to close temporarily because of staff shortages," NSW Premier Dominic Perrottet told reporters in Sydney.
"Confidence is low at the moment but confidence will return when case numbers subside."
Meanwhile, a separate report from the Organisation for Economic Cooperation and Development shows inflation in the OECD area surged to 5.8 per cent in the 12 months to November 2021, the highest rate since May 1996.
It notes that energy prices soared 27.7 per cent over this period, the fastest pace since June 1980.
The Australian consumer price index for the December quarter is due on January 25.