Corona virus vaccine: When will it allow the economy to recover?

The news that the Pfizer and BioNTech experimental vaccine could be approved even in the coming weeks has raised hopes for a strong global economic recovery over the next year. But despite the fact that an effective vaccine could indeed to significantly improve the situation during 2021, economists warn in the Wall Street Journal that it will take longer for the planet to heal from the historic blow to employment, investment and business. And such a development is further exacerbated by the current spate of cases in Western countries. News of the Pfizer and BioNTech vaccine has led to an explosive stock market rally as investors wait for the pandemic-shattered economies to open up. There is room for relaxation of lockdown measures, which have returned in recent days in many Western countries. At the same time, companies facing the biggest problems due to the virus – ie mainly services that require face-to-face contact, such as Hospitality and entertainment – will have to survive several more months of low (or zero) demand. “Our optimism has grown, but the economy will be precarious next year as well.” New shrinking economy due to lockdown The launch of new cases across Europe in recent weeks has brought a second wave of lockdowns, which according to Economists are expected to lead the continent’s economy to a second contraction this year. In the US, the authorities have generally avoided new measures of a similar stringency to the European ones, and the economy is expected to continue to grow, albeit at a slower pace. and European economies will return to their pre-pandemic size, since most economists had already considered vaccine development in their forecasts. U.S. and eurozone lawmakers expect each region to recover to pre-pandemic size during 2022. Risks of limited availability The rich world will be the first to benefit financially from a vaccine. Britain, the US, the EU and Japan have already ordered large doses of the Pfizer vaccine and will be the winners if the vaccine proves safe. The same is true for most vaccines approaching approval. Corresponding moves do not belong to the choices of most poor countries, which are likely to delay accessing successful vaccine doses. The Duke Health Innovation Center estimates that there will not be enough vaccines to meet the needs of the world’s population before 2024. The impact of even a limited availability would be huge. Analysts at research firm RAND Europe say the global economy is currently losing $ 3.4 trillion a year. If an effective vaccine were available in the US, EU, UK, China, India and Russia, he estimated the loss would be reduced to $ 1.2 trillion or $ 103 million per month. However, if distribution were more extensive, and only the poorest countries were initially left without access to the vaccine, the annual loss would be limited to $ 153 billion, increasing the benefits for the richer countries. “If only the countries that are able to develop and mass-produce vaccines would benefit in the first year “They would make huge profits on financial terms, but they would do even better if the vaccine could reach everywhere,” RCO researcher Marco Hafner told the WSJ. Multi-speed recovery The United States is one of the countries that will deliver safe and effective vaccines in the coming months. But many of the industries that have been hit hardest by the pandemic, such as airlines, hospitality and retail, are not going to fully recover until it is safe to gather many people at short distances, which can only happen after millions of people are vaccinated. Bars, restaurants and hotels are responsible for more than 25% of the roughly 10 million jobs lost between February and October, according to the Labor Department. “We could see a real explosion if we get to the point where all these industries can suddenly reopen, if in one month during the following spring or summer there were ads for one million jobs in restaurants and 100,000 for jobs related to travel and 100,000 for jobs at social events “, points out to WSJ Steven Stanley, chief economist at Amherst Pierpoint Securities. The US unemployment rate, which peaked at 14.7% in March, is likely to recover from a record low of 3.5% in February, just before the pandemic, by the middle of next year, according to Stanley. Others argue that it will take more time to recover the lost positions. “Not only will we have faster growth, but this growth will be mainly in the services sector,” Michael Pierce, an experienced US economist at Capital Economics, told the WSJ. “In terms of jobs, it will probably take a few more years.” The role of psychology Even if the full impact of the vaccine is not felt for several months, there could be some short-term benefits due to the increase of optimism. Andy Haldein, chief economist at the Bank of England, said the approval of a vaccine would “change the game” as it would promise an end to the “stop-start” cycle, with restrictions on business only being lifted. only to return to each new increase in cases. “This will make the biggest possible difference, whether a business is viable or not, whether or not that investment will be made, in terms of whether the psychological signs “They will persist and deepen, or if there is a sense that things will start to improve at some point in the near future,” he said. Need for government support. But Fidley stresses that hosting providers will continue to need support to survive during the crisis. months before people can behave like they used to in public. That is why he called on the British government not to withdraw excise tax cuts on hospitality services, while urging it to reduce the non-household property tax. “But if they are not careful, they will not survive.” Darley Perkins, an economist, told WSJ that the recent rise in infections and new restrictions on activity have created a sense of “defeatism” in lawmakers who have “Now, if we have an effective vaccine, we will return to the March situation,” said Perkins, who has already raised huge funds to support businesses, hoping the pandemic would be brought under control within a few months. “It simply came to our notice then. Now we see where we need to go “. Follow it on Google News and be the first to know all the news See all the latest News from Greece and the World, at

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