Interview
The Outlook for Vaccine Distribution and Global Growth
- Slow vaccine distribution initially driven by insufficient planning is expected to correct as planning improves and temporary bottlenecks such as underutilized channels and regulatory red tape are resolved.
- A sharp increase in daily vaccination doses is predicted to be driven by economic, health, and political incentives, with a significant pickup anticipated in many developed markets starting in February and a gradual steepening of the vaccination curve through the spring.
- Specific distribution strategies from Israel, including broad tiering and large centers, are viewed as replicable in developed markets after a transition period, supported by the US activating pharmacy channels and Germany fully bringing online 400 mass vaccination centers.
- Experts project that Israel will likely see a decline in hospitalizations by the end of January, with large shares of vulnerable populations in most developed economies receiving their first dose by the end of the first quarter, reaching 50% first-shot coverage by April (UK), May (US), and June (EU).
- Developed markets are estimated to vaccinate 15 to 20 percent of their population per month by May, with widespread vaccinations expected to trigger herd immunity and a sustained upturn in virus-sensitive economic activities by the end of the summer.
- The overall outlook for global growth this year is viewed as optimistic and above consensus, relying on strong monetary and fiscal policy support, though risks are large, two-sided, and likely tilted to the downside.
- Significant uncertainties include the unprecedented scale of the distribution campaign, potential negative impacts from further viral mutation requiring higher vaccination shares for herd immunity, and the risk that hospital resource drains from a more contagious strain could delay timelines.
- Potential upside risks to the growth baseline include the impact of large US fiscal spending and a surge in pent-up demand or a "party effect" boosting economic activity stronger than expected.