Vaccine Rollout Divides US and European Economies

US Pfizer Vaccination Progresses Smoothly Boosting Economic Recovery Hopes
Europe Faces Economic Outlook Downgrade as AZ Side Effects Delay Recovery

[Asia Economy Reporter Park Byung-hee] This year, the gap in economic growth rate forecasts between the United States and Europe is widening. As the speed of COVID-19 vaccination differs, there are forecasts that the pace of economic recovery will also diverge. According to the Wall Street Journal and others on the 21st (local time), recently in Europe, confirmed cases have increased due to refusal of the AstraZeneca vaccine and the spread of variant viruses, leading to the re-expansion of lockdown measures.

Economic forecasts downgraded one after another due to expanded shutdowns

The French government imposed movement restrictions for four weeks starting from the 20th on all 16 departments including the ?le-de-France region, which includes Paris, and parts of the Hauts-de-France region centered on Lille. German Chancellor Angela Merkel will hold a meeting with the governors of 16 states on the 22nd to decide whether to strengthen lockdown measures. Some cities such as Hamburg and Cologne have already tightened restrictions, and Berlin has prepared a draft to strengthen quarantine measures including COVID-19 testing for all overseas arrivals.

Currently, the vaccination rate in the European Union (EU) is only 12%. In contrast, the United States is at 37%, and the United Kingdom at 43%. Due to the difference in vaccination speed, the pace of returning to normal life is also diverging. According to Google Mobility data, the number of Americans visiting shopping centers and cafes recently has recovered to 90% of pre-COVID-19 levels. In contrast, in Europe, it remains at about half of pre-COVID-19 levels.

Europe’s vaccination speed is delayed due to concerns about side effects of the AstraZeneca vaccine. Although the European Medicines Agency (EMA) confirmed on the 18th that the AstraZeneca vaccine is safe and effective, some countries still show caution in administering the AstraZeneca vaccine.

Institutions are repeatedly lowering their economic growth forecasts for Europe this year. ING revised the Eurozone GDP contraction in the first quarter of this year from 0.8% to 1.5%, expecting a larger decline. Economist Karsten Brzeski said, "The growth forecast was based on the expectation that lockdown measures in Europe would gradually ease by March, but now the outlook for easing lockdowns in March must be abandoned."

German investment bank Berenberg lowered its Eurozone economic growth forecast for this year from 4.4% to 4.1%. Barclays maintained its Eurozone growth forecast at 3.9% for this year but lowered next year’s forecast from 5.3% to 4.3%. Morgan Stanley predicted that if lockdown measures continue for several more months, Europe will face another ‘lost summer,’ with GDP in Italy and Spain, where tourism is a large part of the economy, shrinking by about 2-3%. The EU Commission expressed concern that if lockdowns are extended for more than three months, the Eurozone’s economic growth rate this year could be limited to 2.5%.

US cafe visits reach 90% of pre-COVID-19 levels

In the United States, smooth administration of Moderna, Pfizer, and Johnson & Johnson vaccines is raising expectations that the economic recovery period will be accelerated.

On the 19th, just 58 days after President Joe Biden’s inauguration, the number of vaccine doses administered surpassed 100 million. President Biden had pledged to reach 100 million doses within 100 days of his inauguration but achieved this milestone 42 days ahead of schedule.

In a national address on the 11th, marking one year since the World Health Organization (WHO) declared the COVID-19 pandemic, President Biden announced a goal of independence from the coronavirus by Independence Day, July 4th. He declared, "By July 4th, Americans will be able to gather in small groups at least, making this Independence Day truly special."

With President Biden’s stimulus package including $1,400 cash payments to each American individual, there are forecasts that economic recovery will gain momentum. Goldman Sachs raised its US economic growth forecast for this year from 6.4% to 8%.

This content was produced with the assistance of AI translation services.