indicatorThe Owl

Timing is everything

Everything depends on the speed at which the vaccines are rolled out

By ATB Economics 5 January 2021 2 min read

We knew that things wouldn’t magically return to normal when the clock struck midnight on January 1. Still, with a variety of seemingly effective COVID-19 vaccines starting to be rolled out, a return to normal at some point in 2021—or at least some semblance of normal—is possible.

But when? Next month? By Canada Day? Not until Christmas?

In this regard, it might be helpful to think of three broad phases linked to the vaccination process.

The first phase is underway and involves getting health care workers and the most vulnerable vaccinated. The winter surge in COVID-19 cases remains a major challenge, but the initial rounds of vaccination should lower the mortality rate and take some of the pressure off the health care system.

As the weather warms, more people get vaccinated, and the daily numbers improve, we will move into the second phase. This period will be marked by the reopening of most parts of the economy and will be similar to how things were last summer. The pandemic won’t be over and many public health measures will still be in place, but the economy will be much less constrained.

Phase three is when the herd immunity needed to truly put the pandemic in the rearview mirror is achieved. The economic damage linked to the pandemic won’t be repaired overnight, but at least it won’t be inflicting fresh pain.

That still leaves the question of when phase two and three will start.

An optimistic scenario would see a version of phase two in play by spring with the pandemic fading away by fall.

In a more pessimistic scenario, stage two is delayed and lasts into the fall with herd immunity not achieved until closer to Christmas.

Everything depends on the speed at which the vaccines are rolled out, their effectiveness, and the willingness of people to get vaccinated.

Amid this uncertainty, we can count on two things. First, the economy will likely be better in 2021 than it was in 2020. Second, it will be a bumpy ride to phase three with some things getting back to normal remarkably quickly, some things getting worse before they get better, and some things never being the same again.

Answer to the previous trivia question: There are just under 159 litres in a barrel of crude oil.

Today’s trivia question: As of January 4, 2021, what was the cumulative number of confirmed global cases of COVID-19?

The sooner herd immunity is achieved, the sooner the economy will fully recover

The sooner herd immunity is achieved, the sooner the economy will fully recover

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