The slowness and disorganization in the national vaccination program against covid-19 will remove at least two percentage points of the country’s Gross Domestic Product (GDP) in 2021. According to calculations by economist Bráulio Borges, from consultancy LCA, if 70% of the population receive the vaccine until August, the Brazilian economy it would grow 5.5% this year. If vaccination reaches this level only in December – a hypothesis that is now considered optimistic -, the growth of START should be between 3% and 3.5%. In this scenario, the country will stop moving R $ 150 billion.
Borges also outlined an optimistic hypothesis: estimating the impact of a more agile vaccination on the economy, at a pace similar to that of Israel – the most advanced country in immunizing against the new coronavirus. In this scenario, 70% would be vaccinated by June, allowing measures of social distance to be relaxed and ensuring the return of activities in which there is agglomeration. In this case, GDP could advance 7.5%, an increase of R $ 260 billion.
The 3% to 3.5% growth expected for the economy in the worst case scenario (with most of the population vaccinated by the end of the year) may seem positive, given that the last time the country advanced 3% was in 2013 In practice, however, it will mean that the economy has been stagnant all year. This stems from what economists call “statistical load” – when the basis for comparison is low (the average GDP result in 2020), but the starting point is high due to the recovery over the last half of the year.
The increase of 3.5% will also mean that the country will have, at the end of 2021, a GDP 1% below that registered in 2019. The per capita economy will have an even more negative result: 2.5% lower than in 2019. ” These calculations are a simplified exercise that shows how we can have a economic growth if we move faster with vaccination, which today seems to be a very distant reality “, says Borges.
For now, LCA projects that GDP will be 3.5% this year. But Borges acknowledges that perhaps the reality “is even worse than this bad scenario”.
A Consulting Trends it is more pessimistic and estimates a GDP of 2.9%. “Our projection is cautious because we already had a concern with the pandemic situation and we did not have the perspective that there would be a vaccination movement affecting a relevant part of the population in the first half. Another concern is with the fiscal situation”, says the chief economist at consulting, Alessandra Ribeiro.
Brazil’s risk rating
Austin Rating chief economist Alex Agostini says there is even a risk that Brazil’s risk rating will be lowered again because of the delay in immunization. “There is an indirect risk because, as we do not have a mass vaccination, the confidence of economic agents falls. People also stay more at home and this affects a component that is analyzed to determine the risk, which is GDP.”
Economist Zeina Latif warns that the loss of vaccine doses, as has been verified in some cities due to technical problems, and the 50% effectiveness of Coronavac, which is being produced in the Butantan Institute, make it more difficult to achieve herd immunity. “This factor of uncertainty will weigh in 2021. We will still spend a good deal of time with limitations on economic activity. And the service sector is the most impacted by the pandemic, in addition to being the one with the greatest weight in GDP. have no disappointments with the economy. ”
According to an estimate by the Ministry of Health, vaccination should take “up to 12 months after the initial phase”. This, however, will depend on “the number of vaccines available for use”. Epidemiologist Carla Domingues, who coordinated the National Immunization Program for eight years, recalls, however, that there have already been delays in receiving the first doses of immunizer and that it is not possible to be sure that the deadline will be met. “Even those who bought the vaccines in advance are in trouble (to receive them). Imagine who did not buy. This one goes to the end of the line, because the world demand is very big. ”