- Q1 GDP Growth Jumps 1.1% on Strong Personal Consumption
- A Strong March Leads to a Surge in Chinese GDP in Q1 2023
- Durable Goods Retail Sales Suffer from High Interest Rates and Wary Consumers
- Choppy GDP Means UK Should Avoid Q1 Recession
- Japanese Consumer Confidence Jumps to Highest Level in Over a Year
- The End of Summer Sees the End of Disinflation in Europe
- Labor Market Indicators are Starting to Unify on Easing in Hiring
- Inflation and Tight Financial Conditions Weigh on the German Consumer
- Euro Area Money Supply Contracts for the First Time Since 2010
- Dismal Economic Data Out of Germany
- Core Durable Goods New Orders See Gentle Uptrend in July
- More UK Data Pointing to Q3 Decline
- Whispers of a UK Contraction in Q3
- Japan's Core Inflation Resumes Uptrend in July
- Early July Economic Data Leads to a Sharp Increase in Q3 Growth Expectations
- UK CPI: Energy Inflation Crashes but Services Inflation is Still Sticky
- China's Weak Start to Q3 Means More PBoC Easing
- A Breather for the Eurozone as Inflation Hits Two-Year Low
- Germany's September CPI Report: A Clearer Picture of Inflation Trends
- US Manufacturing Demonstrates Resilience Amidst Volatility in August
- The ECB Prepares to Address Excess Liquidity Through the MRR
- Bank of Japan is Too Optimistic on Inflation
- The Bank of England Pauses in a Near Split Decision
- UK Inflation August Update: A Precursor to the Bank of England's Announcement
- Housing Starts Tumble in August Amid Rising Mortgage Rates
- US Retail Sales Grow at Fastest Monthly Rate Since the Start of the Year
- US Consumer Prices Surge in August Driven by Energy Costs
- August NFIB Survey Showed a Tough Environment for Small Businesses
- All Signs Point to a Weaker Labor Market in August
- Chinese CPI Trying to Buck the Deflation Trend
- Energy Prices Rise but the Core Disinflationary Trend is Maintained in September
- PPI's Quiet Rise and the Energy Elephant in the Room
- Small Businesses Grapple with Inflation and Financial Strain in September
- A Wacky September Jobs Report Shows Strong Labor Market
- A Look at the Fragile US Labor Market Ahead of the Nonfarm Payrolls Report
- Thoughts on GME and This Week in the Stock Market
- Record Home Price Levels Point to Strength in Post-Pandemic Economy
- The Stock Market Looks Overvalued, but It's Probably Not
- China GDP Growth Surpasses Expectations
- President-elect Joe Biden Introduces His "American Rescue Plan"
- Political Polarization Intensifies with Another Impeachment Along Party Lines
- Metal Demand Has a Bright Future in 2021 and Beyond
- What Happened to That US-China Trade Dispute?
- Civil Unrest, A Rising Threat to the 2021 Economy
- What's in the $900 Billion Relief Plan?
The Latest on Vaccinations and What it Means for Growth
March 01, 2021
The global economy remains on its back foot at the beginning of 2021 as vaccination deployment speeds towards its peak. Optimism among business leaders and in the stock market is firmly rooted in the success of vaccination distribution in order to begin the return to normalcy by the middle of the year. So far, four vaccines have been approved after reporting successful results with the latest Johnson & Johnson vaccine seeing approval on February 27th, 2021. As doses are rolled out and administered across the globe, everyone waits to see how the distribution of the limited supply develops.
Bloomberg's COVID-19 Tracker provides the most up-to-date data on vaccinations. As of March 1st, over 245 million doses of vaccines have been administered in 107 countries with over 76.9 million of those doses administered in the United States. In the US, daily vaccination rates average 1.8 million per day with some days seeing over 2.0 million per day. That translates to 1 or more dose for about 15.3% of the population. Dr. Anthony Fauci, the leading health figure in the US, says that the vaccination rate will have to reach 75 to 80% before normalcy can begin to return. Based on current rates, that would take about 7 months.
The rest of the world continues at a slower pace with about 6.8 million doses administered per day. Most of those vaccinations are being administered in China, the European Union, the United Kingdom, and India. Those four countries account for 65% of rest of the world vaccinations. The timeline at this rate would put a vaccination rate of 75% of the world population 4.5 years away. Of course, different countries will reach that level at different times. Israel, for example, has already fully vaccinated 37.6% of its population while much poorer African and Middle Eastern nations are still trying to secure a vaccine supply. However, in a heavily interconnected world, global herd immunity needs full vaccination coverage regardless of borders.
No one is more invested in global herd immunity than the largest economies which have suffered greatly from lockdowns, and therefore, the IMF G-20 nations monitor progress. The latest report suggests vaccines to be widely available in "G-20 advanced economies and several emerging market economies during 2021" but other areas might have to wait for 2022. Because of that, the IMF sees containment policies remaining in many economies outside of regions that have significant vaccine supply like the United States and the EU.
Advanced economies, like those of the G-20, and emerging economies (not including China and India) are expected to see a divergence in GDP growth. In the IMF's Jan 2021 World Economic Outlook see G-20 advanced economies growing at a low positive rate this year while non-G-20 emerging economies are projected to contract. These contraction forecasts are mostly expected in countries like Russia, Brazil, Mexico, and Argentina. The Latin America and Caribbean (LAC) and Middle East and Central Asia (MECA) regions are expected to see stronger contractions. China and India, large exceptions to the emerging economy rule, are among the highest projected GDP growers in 2021. Unsurprisingly, they are also in the top 5 in global vaccination rates.
The World Bank's reports have also pointed to this trend of doses per 100 people rising much faster than emerging economies. In fact, it cites the fact that "2/3rds of emerging markets and developing economies (EMDEs) and most low-income countries (LIC)" have not deployed any vaccine doses. As a result, EMDE investment is expected to lag the post-financial crisis rebound of 10.8% in 2010 at a projected 5.7% in 2021. History suggests that weak investment may "linger" as the World Bank has found that "losses to investment have been deeper and longer-lasting than GDP losses" after pandemics. Overall, it's a slightly less optimistic picture than what was imagined when vaccines were approved in late 2020.
Vaccines are the key to sentiment in 2021 that's why the data covering dose distribution will be heavily reported on. It may also drive financial markets this year. The outlook is still positive in most advanced economies, but the reality that vaccine availability in less developed regions of the world is weaker will soon set in. True normalcy can only be achieved in a massively interconnected world when those areas have been covered as widely as their richer neighbors.