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Macro & Investment Insights

Escaping COVID-19: Will vaccines be sufficient?

  • 19 May 2021
  • 5 min read

Key points

  • We conduct a detailed assessment of the impact of vaccines and viruses on a large number of countries
  • We find that in only a handful of cases is collective immunity even plausible. In most cases it looks unlikely – and in several impossible – with the current vaccines. This suggests the virus could become endemic
  • Vaccines appear highly successful in reducing virus severity. But even if perfect, which does not appear the case, hospitalisations of unvaccinated groups would likely be too large to allow the virus to spread freely
  • This suggests an ongoing need for non-pharmaceutical interventions, even in mostly-vaccinated countries. Yet we see the risk of countries lifting restrictions too far
  • This risks the re-emergence of the virus and a need to increase restrictions. Precautionary household and company behaviour would likely follow. We include this in our baseline forecasts for later this year
  • A risk scenario where an immune-resistant new variant emerges also exists. This would require a return of more significant intervention, which would deliver a more material economic shock to baseline forecasts.
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