Vaccination delay to cost Europe EUR90bn in 2021

  • With hurdles on the supply side (production & distribution bottlenecks) and a slow start, the EU is increasingly falling behind in the immunity race. Currently, population-adjusted average daily vaccination rates across major EU economies stand at only 0.12%. This is four-times (s)lower than in the UK and the US, where 14.4% and 9.4% of the population have already received at least one dose of vaccine, respectively, compared to a maximum 5% across key EU economies (e.g., Denmark).
  • The EU Commission has recently communicated its goal of vaccinating 70% of the adult population by summer 2021. However, reaching this target would call for a vaccination pace that is roughly six times higher than currently observed. In fact, our calculations show that EU countries are already five weeks behind schedule. As every week of prolonged sanitary restrictions reduces quarterly nominal EU GDP growth by -0.4pp, the current delay represents the equivalent of -2.0pp or close to EUR90bn. This is more than four times the value of the agreements the EU Commission signed with vaccine producers for the 2.5 billion doses so far procured.
  • At the current vaccination speed, herd immunity would only be reached by end-2022. To at least allow for a sustainable economic recovery to take off in the second half of 2021, EU countries must urgently embark on a vaccination path that aims at vaccinating at-risk populations (20%-30% of the total depending on demographics) by mid-2021 to allow for an easing of sanitary restrictions without putting the healthcare system at risk. However, at the current slow vaccination pace, the immunization of the vulnerable population would call for at least a doubling of daily vaccinations administered. 
  • Even based on this less ambitious optimal path, the delay in vaccination tallies up to three weeks, in turn carrying a cost of EUR63bn. It should be noted that these costs will continue to increase for as long as the vaccination rate continues to be below the optimal path. But conversely, this also means the delay can be quickly reduced if the vaccination rate rises significantly above that of the optimal path. This would be conceivable if the bottlenecks in production dissipate at the end of Q1 2021. For example, through the approval of a new vaccine (which in the best case only requires one shot) or the development of new production sites. If a speed of around 1% of the population is reached in this way (which would roughly correspond to the German government's goal of vaccinating 5million per week), then by early Q3 2021 the delay would indeed be made up for.


Ludovic Subran
Allianz SE
Ana Boata
Allianz Trade