Rarotonga's Omicron peak expected in next few weeks

The Cook Islands, Covid-free for two years, now has more than 1200 cases - and is projecting half of Rarotonga's population will have been infected with Omicron before the outbreak peaks in the next few weeks.

The country's 98% vaccination rate has so far kept people out of hospital but isolation requirements to protect the vulnerable has hit businesses hard.

The Cook Islands second oldest company, Island Craft, is one of them. Managing director Fletcher Melvin says he got rapid antigen tests for his staff and half of them tested positive.

"We are very short - as you can see in our factory we normally have nine guys in here we are now down to one person," he said.

Prime Minister Mark Brown says the arrival of Omicron has not been so much a health issue but more of an inconvenience affecting business and the economy.

"The economy I guess is now in recovery mode - we've had two years where we've lost nearly 30% of our GDP a significant drop probably the biggest drop of any country in the region if not in the world. If you compare to New Zealand, New Zealand's loss in the economic growth was about 1.8%," he said.

The Government has just extended the wage subsidy until mid April which has been welcomed by the business community.

Phillip Henderson from the Chamber of Commerce says economic recovery has been slower than expected and now the Omicron outbreak has forced some businesses to temporarily close their doors while their workers isolate.

He says the subsidy has been a godsend for the private sector "without it a lot of businesses would have gone to the wall already" but when it ends "they may really have to consider closing shop".

The Prime Minister is promising his cabinet will look at extending it a little further but it's "not likely to have an unlimited amount that we can just continue to pay out".

The country is counting on tourism to get back to its pre-Covid boom times - the opening of borders to Australia on April 12 and the rest of the world on May 1 should help with that giving businesses and the economy the critical boost it needs.