Spain | Mass, rapid vaccination: the best economic policy

Summary

For both health and economic reasons, the best policy is to speed up COVID-19 vaccinations as much as possible. It is currently the most profitable social and economic investment. However, it requires anticipation in regard to logistics, infrastructure and healthcare workers to achieve herd immunity before summer.

Key points

• Key points:
• Although the vaccination campaign in Spain is making better progress than the EU average, it is slower than in some countries, such as Israel (over 76 doses administered per 100 people in mid-February) or the United Kingdom (23 doses administered per 100 people).
• We have encountered a serious roadblock in the supply of vaccines as a result of negotiations between the European Union and pharmaceutical companies. As a result, the autonomous communities are forced to administer vaccinations regardless of whether or not there are sufficient doses, or if the second dose can be administered.
• If the health situation were to practically normalize over the summer months as a result of mass vaccinations in Spain and Europe, the tourism, hospitality and restaurant industries would wake from their current coma, significantly affecting the survival of many businesses, aggregate activity and employment.
• According to BBVA Research forecasts, should the health situation normalize by halfway through the year, this would allow quarterly growth in 2H21 to fluctuate between 2.5% and 3%. Delaying this scenario by one quarter would knock at least one percentage point off annual GDP.
• If vaccines were freely available, the next challenge would be to increase the vaccination rate. As at February 11, 2.4 million people had been vaccinated in Spain and 1 million people had achieved immunity — an increase of around 318,000 compared to the previous week. Vaccinating 33 million adults by the end of the second quarter would require immunizing 2.3 million people a week, or 7 times the current weekly immunization rate.

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