The announcement earlier this week that an effective coronavirus vaccine has been developed was given a rapturous welcome by global markets, but UBS Chairman Axel Weber cautioned that even with a vaccine, it will take time for the global economy to get back to pre-crisis levels.
“Going forward, I’m not pessimistic. I mean, eventually we’ll get through this. But we should not be under the illusion that it will happen fast, it will take some time,” Weber told CNBC’s Joumanna Bercetche Tuesday.
“It would be at least a year to go back to pre-crisis levels of GDP (gross domestic product). It’ll take another year or two to be anywhere near getting unemployment and pre-crisis growth back and so it would be quite a long recovery that we’re facing,” he said as UBS holds a virtual European conference this week.
Hopes that life, and the economy, could get back to normal sooner rather than later got a huge boost on Monday when U.S. pharmaceutical giant Pfizer and German firm BioNTech announced that their coronavirus vaccine was more than 90% effective in preventing Covid-19. Pfizer’s CEO and Chairman Dr. Albert Bourla hailed the development as “a great day for science and humanity” and stock markets around the world soared.
The optimism around the announcement was tempered with a dose of reality given the likely difficult logistics of mass production and transportation of a vaccine, particularly when time is of the essence in terms of saving lives and livelihoods.
The Pfizer vaccine requires two doses per person and based on current projections, only 25 million people could be vaccinated by the end of the year; Pfizer and BioNTech said they expect to produce up to 50 million vaccine doses in 2020, and up to 1.3 billion doses in 2021. The world population is estimated to be around 7.5 billion and there could be wranglings over which countries receive the vaccine first, although governments in Europe, the U.K. and the U.S. have already bought millions of doses.
Asked about his reaction to the vaccine, Weber said while “it was definitely good news,” it would take time to roll out vaccination programs at a domestic and global level. The expectation is that Covid-19 vaccines will be given to those in health and service occupations first, as well as the most vulnerable members of society, before it’s rolled out to the rest of the population.
“We’ve been waiting for some good news for some time now … And the latest news has been really taken well by the market. But you know, you have to take this with a grain of salt,” Weber cautioned.
“The disappointing part of the news was that the much lower than expected number of vaccinations that can be produced in a year, and if you look at the rollout, that will happen, it’s going to take some time, ’til we move to roll this out.”
Asked what the vaccine means for the Swiss lender’s forecast for 2021, Weber was cautiously optimistic.
“You know, if dispensing that way … actually has an impact on economic activity, it will eliminate some tail risks, and some of the human suffering will be much improved as a result of it. But it’s a long haul (before) we get anything that is close to what people call mass immunity,” he said.