The latest data by the World Health Organization (WHO) indicates that there are 60 vaccines under clinical development as at 29th December 2020 with 9 out of the 60 classified to be undertaking testing under phase 3, with the remaining 51 in either phase 1 or 2.
According to the science of vaccines, it is only the Phase 3⁸ trials that can provide a pivotal demonstration that a vaccine both works and is safe.
Baseline economic scenario assumes a gradual normalization in economic activity in the initial months of the year 2021, projected to accelerate in the second half of 2021 on the back of meaningful progress towards herd immunity ⁹under the assumption of successful vaccination implementation.
The OECD has since projected recovery in 2021 with a projected growth forecast of 4.2 per cent under the expectation that vaccination campaigns, concerted health policies and Government financial support will lift the global GDP.
The recovery is however expected to be stronger if vaccines are rolled out fast, boosting confidence and lowering uncertainty.
Morgan Stanley on the other hand has a more optimistic forecasted growth rate of 6.4 per cent in 2021 with the latter expecting that the growth would first be led by emerging markets, followed by reopening economies in the U.S. and Europe.
However, according to analysis by KBC Economics, two vaccine specific risks still hang in the balance despite the positive sentiments. The first is related to the virus evolution, namely new local outbreaks or the possibility of a third wave of the pandemic.
The second relates to developments on the vaccine front that could affect the timing of reaching herd immunity across jurisdictions particularly the African continent.
Faster vaccine deployment and better cooperation for its distribution would therefore boost confidence and strengthen the pickup but continued uncertainty risks further weakness.
Further, delays to vaccination deployment, difficulties controlling new virus outbreaks and failure to learn lessons from the first and second waves would weaken the outlook. The bounce-back is projected to be strongest in the Asian countries that have brought the virus under control but even by the end of 2021, many economies will have shrunk from 2019 levels before the pandemic. The decline in 2020 is still nearly twice as deep as that in 2009, when world GDP fell by 2.1%.
While the world remains optimistic of a more favorable 2021, new research by the Eurasia group found that the economic benefits of a global equitable vaccine solution alone for just 10 high-income countries would be at least US $153 billion in 2020-21, rising to US $466 billion US dollars by 2025.
This calls for a global intervention to subsidize the costs of the vaccine to favor access particularly to low-income countries. Kenya, like other economies has suffered the economic impact of the pandemic and is projected to record a growth rate of 1 % in 2020.
This is a relatively significant slump compared to 5.4% growth recorded in 2019. However, 2021 is projected to be more optimistic for the country, estimated at 4.7% based on IMF’s projections.
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