Resilience Retested: The Upcoming Transition to Autonomous Growth

Senior Economist
Head of Policy Research
Investment Strategist

A Tale of Two V’s –Virus vs. Vaccines. Will we see a winter of discontent or containment?

The year 2020 will go down in the annals of history as an unprecedented year for human crises—financial, medical, and social. The expansive impact of COVID-19 crisis across 200+ countries could not have been predicted or anticipated. It has been a learning and testing year not only for financial market participants and observers but also for the experts across epidemiology, pharmacology, medicine and molecular biologists. As of Dec 8, WHO reports cumulative numbers of over 65.8 million reported cases and 1.5 million deaths globally since the start of the pandemic.

US, India, Brazil, Russia and France top the country list of highest Covid-19 cases while US, Brazil, India, Mexico and the UK top the list of Covid-19 fatalities (Our World in Data, 2020). The initial surge of the pandemic in February through May took the world by surprise but good policies of distancing, lockdowns, test and preventive measures helped slow down the virus toll in the summer months. However, since September many countries are experiencing a second or third surge of virus cases with governments imposing different variations of lockdowns. A measure of lockdown severity, the Oxford Stringency Index (OSI) records the number and strictness of government policies. For most developed economies the index peaked over April to May followed by a trough and reversing with a second surge in November indicating stricter lockdowns.

Since the initial Jan 2020 genome sequencing of the Covid19 virus, the global race for a vaccine has led to increased expedient focus across health experts, pharma industry, regulators and global institutions. The vaccine race and economic costs of lockdowns have been a major part of the US election campaign. US’s “Operation Warp Speed” and other urgent national efforts have led to 6 or 7 contenders for regulatory approvals for the speedy release of an effective vaccine.. The leading developers Pfizer/BioNTech, Moderna, AstraZeneca/Oxford and Sinovac have produced vaccines undergoing several stage trials with a tested efficacy rate of up to 95% (Pfizer, 2020). The Pfizer-BioNTech vaccine became the first to get UK approval with the first vaccines being administered to priority patients on Dec 8 and a similar US approval imminently expected as we go to press. Hopes of an economic and financial recovery hinge on the successful vaccination of 70% of the population which would entail safe, effective and equitable distribution of vaccines throughout the world.